The big three credit bureaus -- TransUnion, Experian, and Equifax -- are putting new information in credit profiles that could help credit card issuers flag low-risk customers. The data will indicate whether a borrower is a "revolver" who carries a balance into each month and incurs interest or a "transactor" who tends to pay off purchase costs in full before the next billing cycle.
TransUnion's Ezra Becker insists that transactors are "absolutely" less likely to default on debt than revolvers. "This is another tool we are giving to lenders to be able to manage risk," he explains. "The idea is everyone should pay for the risk they present. If you treat everyone the same, the low-risk people subsidize the high-risk people."
While Linda Sherry of the advocacy group Consumer Action believes that adding credit card payment amounts to file data is generally a good thing, she does worry that card issuers could use the information to penalize transactors -- by hiking fees, for example, to make up for the failure to generate revenue from interest charges.