Retail customers often opt for private label cards. However, they end up not using their cards because they consider their limits unsuitable for their spending pattern. It is not always easy to know the level of customer spending or their estimated income a priori. Thus, companies take conservative measures by limiting the threshold in the early stages of the relationship with customers.
In this sense, Segmentation Brazil was crossed with the data of the company itself, aiming at providing a basis for making decisions. Each customer was labeled with a suggestion of limit adequacy in the database considering their market profile. The study also identified how much each affiliated establishment, the private label issuer, had adequate limits. This analysis allowed us to evaluate the total exposure to credit risk necessary to meet the market’s limit adequacy.