Purchase Solution

Operations/Credit Card Risks

Not what you're looking for?

Ask Custom Question

I need some help getting started on the following scenario:

You are hired as the director of credit card operations for Western Bank. Explain to the board of directors the primary risks involved with a credit card operation and ways to deal with those risks. Be sure to address the following in your report:

- Credit risk
- Transaction risk
- Liquidity risk
- Interest rate risk

- Is it a good idea of the bank to assess the risk of credit cards? Why or why not? How does a bank know if it can afford to take these risks?
- What are the potential benefits to banks?

Purchase this Solution
Solution Summary

The expert examines operations and credit card risks. The potential benefits to bank are determined.

Solution Preview

Before assigning credit to someone, Western Bank must consider the 5 C's of Credit: the capacity to pay, collateral should the loan go in default, your character based on your payment history according to your credit report, the amount of capital or cash available should you need money quickly to pay on the loan, and the conditions, usually, working conditions to ensure a ...

Solution provided by:
Keonda Grant-Taylor, MBA
Education
  • Doctorate of Management in Organizational Leadership, University of Phoenix - Online
  • MBA, Webster Univeristy
  • Dual BS Degrees, University of South Carolina
Recent Feedback
  • "Thank you"
  • "Thank you so much! This helps me understand this a lot more. Thank you!"
  • "Thank you."
  • "Thank You, Keonda! Your response is very much appreciated."
  • "Thanks!"
Purchase this Solution
Free BrainMass Quizzes
Six Sigma for Process Improvement

A high level understanding of Six Sigma and what it is all about. This just gives you a glimpse of Six Sigma which entails more in-depth knowledge of processes and techniques.

SWOT

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

View More Free Quizzes
Related BrainMass Solutions

  • IT-based systems and operational/financial risks

    Risks that auditors need to consider for companies that process Web-based sales transactions, including credit card payments: Risk #1: On the Web, many fear providing credit card information to any commercial Web provider and that consumers simply

  • Target Finds Buyer for Half its Card Receivables

    The proceeds would allow Target to either buy back shares or fund business operations without resorting to borrowing from the seized-up credit markets.

  • Internal Controls Development and Implementation

    Attorney] said some of the suspects were involved in "skimming," an act by which a person can obtain credit card information by running the card through a handheld counterfeiting device.

  • Money - Methods of Payment

    There is a risk that the customer may not pay his credit card bill or that the card could be stolen. 3.

  • Adverse selection of credit card customers

    Low rates tend to attract borrowers with low balances who are better risks. Using multiple interest rates allows the credit card companies to sort customers into different risk groups. b.

  • Equity and price discrimination

    Because the company can only use one rate, it must choose between attracting those who are good risks, and giving a low rate to borrowers who are poor risks. The credit card company would like to make those with poor credit pay a higher rate.

  • Methods of Payment

    Let's compare some popular payment types and risks and benefits of each, according to MonsterSmallBusiness.com: 1. Credit Cards Accepting credit card payments is important for any e-commerce site.

  • Analysis of Credit Card Safety

    It is due to such risks associated with using credit cards online that many consumers are still skeptical about shopping online and still prefer to buy at their favorite brick and mortar stores.

  • E-commerce Security and Privacy: Education on Security Concerns

    The fraud of credit cards is also one of the major risks in an online business. The confidence of a customer is decreased by paying online with credit card (SSL: Your Key to E-commerce Security, 2008).

View More Related Solutions