credit department handles the credit granting, credit collection and credit limits of their applicants
No. However, there are often annual fees, application fees or late fees that apply, the details of which have to be revealed to the applicant. Some have no annual fee credit cards. It is important to always read the terms & conditions and all fine print thoroughly so that you fully understand all costs associated with a particular credit card.
costs associated with securing finance
Granting credit to customers can lead to increased risk of default, as some customers may fail to repay their debts, resulting in financial losses for the business. It can also complicate cash flow management, as delayed payments can strain liquidity and hinder operations. Additionally, extending credit requires administrative resources for monitoring accounts and collections, which can increase operational costs. Lastly, it may lead to a potential negative impact on customer relationships if payment disputes arise.
The risk of lending on character is called "moral risk," the risk of lending on capacity is called "business risk," and the risk of lending on capital is called "property risk." An ideal borrower will combine a minimum of each of these three risks
credit department handles the credit granting, credit collection and credit limits of their applicants
Granting credit typically depends upon three factors: character of the borrower, capacity to repay, and capital used as collateral
Yes
No. However, there are often annual fees, application fees or late fees that apply, the details of which have to be revealed to the applicant. Some have no annual fee credit cards. It is important to always read the terms & conditions and all fine print thoroughly so that you fully understand all costs associated with a particular credit card.
Costs associated with credit cards are based on percentages and depend invariably upon how much you have credited to them. Unfortunately there is no easy answer; however, if you have good credit it may cost nothing.
costs associated with securing finance
You are correct that banks often check your credit score before granting a loan. There are many companies that offer your credit score including http://www.myfreecreditreport.com
Credit reporting agencies keep files of information on all consumers who have made credit transactions at some point in their lives. Credit granting institutions may purchase these files
not conducting credit investigation to the client before granting the loan
[Debit] Staff loans [Credit] Cash / bank
The risk of lending on character is called "moral risk," the risk of lending on capacity is called "business risk," and the risk of lending on capital is called "property risk." An ideal borrower will combine a minimum of each of these three risks
The basic job description for a credit manager is to be accountable for the entire credit granting process. This process includes the consistent application of credit policy, periodic credit reviews of existing customer, and the assessment of the creditworthiness of potential customers.