Skip to main content

Fed study sounds alarm over algorithmic rises in credit limits

Researchers say US lenders are extending too much credit to subprime borrowers

Credit cards

The widespread practice of banks increasing credit card limits poses potential harm to consumers and raises questions for policy-makers, argue researchers with the Federal Reserve Board.

Their paper, published on January 16, says credit cards are underpinned by “an increasingly complex algorithmic infrastructure”, which determines who receives more credit and when. Credit card issuers deploy sophisticated algorithms that continuously analyse users’ spending and borrowing behaviour, and often

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@centralbanking.com or view our subscription options here: subscriptions.centralbanking.com/subscribe

You are currently unable to copy this content. Please contact info@centralbanking.com to find out more.

Sorry, our subscription options are not loading right now

Please try again later. Get in touch with our customer services team if this issue persists.

New to Central Banking? View our subscription options

Register for Central Banking

All fields are mandatory unless otherwise highlighted

Show password
Hide password

Most read articles loading...

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account

.