Credit Card Billing Cycle

Cards Cards Credit Card Billing Cycle

This document outlines the procedures and configurations for managing the Credit Card Billing Cycle within the FLEX system. The billing cycle is a critical monthly process for posting fees, interest, and generating statement files for credit card loans.

1. Running the Credit Card Billing Cycle

The Credit Card Billing Cycle must be executed monthly.

Prerequisites:

  • All credit card transactions for the month must be completed.
  • The billing cycle must be run prior to initiating the End of Day process.

Procedure:

  1. Navigate to the Credit Card Billing Cycle Option:
    • From the FLEX Main Menu, select the Credit Card Billing Cycle option located under Credit Cards.
  2. Define the Statement Period (From/To Date):
    • Enter the desired date range for the billing cycle.
    • “To Date” Considerations:
      • The “To Date” can be set in the future or the past, but with important caveats:
        • Backdating: Only possible if no transactions have posted to any credit card loan between the current date and the backdated “To Date.”
          • Example: Running the October billing cycle on November 1st, backdated to October 31st, is only permissible if no transactions (including FLEXTeller and Audio Response) have posted to a member’s credit card loan since October 31st.
          • The system will issue a warning if transactions have occurred.
        • Forward Dating: FLEX does NOT recommend forward dating the billing cycle.
          • Transactions occurring between the current date and the forward-dated “To Date” will not be calculated in the current billing cycle. They will be included in the next billing cycle, effective from the next cycle’s start date, which will affect interest calculations.
          • Example: Running the billing cycle on October 30th and forward dating to October 31st will exclude any transactions posted on October 30th or 31st from the October billing cycle. These will be included in the November billing cycle, effective November 1st.
  3. Update Files Option:
    • Update Files ‘N’ (Generate Worksheets):
      • This option generates worksheets for review.
      • It is crucial to run a worksheet version (N) before updating files (Y) to identify and correct any errors before statements are generated.
      • Worksheet versions append a (W) to the report ID (e.g., CARDSTMTW). These are not valid statements and should not be printed.
    • Update Files ‘Y’ (Run Billing Cycle and Post):
      • This option executes the Credit Card Billing Cycle, posts fees and interest to member accounts, and generates official statements.
      • Warning: Once the billing cycle has been posted with Y, it cannot be reversed or re-run.

2. Functions Performed During the Billing Cycle

When the Credit Card Billing Cycle runs, it performs the following key functions:

  • Annual fee posting
  • Over-Limit fee posting
  • Calculation of Month-To-Date (MTD) loan activity
  • Finance charge posting
  • Calculation of minimum required payment
  • Loan due date advance (for non-delinquent loans)
  • Statement printing

3. Reports Generated by the Billing Cycle

The posting process automatically generates the following reports:

  • CC3000P2 – CCFEEDETL: Fee detail report.
  • CC3000P1 – CCFEESUMM: Fee summary report, showing total fees and interest per loan type and the general ledger posting.
  • CC3006P – CCLATEFEE: Late fee detail report.
  • CC3001P – CCCATEXP: Category expiration report.
  • CC1100P – MTDAVGBAL: Month to date average daily balance report.
  • CC5004P – CCNEGCATG: Negative categories report (showing credit card loan categories with a negative balance).
  • CC3020P – CARDSTMT: Credit card statements.

4. Error Handling and Warnings

The system provides messages and reports to assist in identifying and correcting issues:

  • “Processing will be canceled. Loans exist that have balances that do not equal the category balances. Please view the generated reports.”
    • This critical error message indicates a discrepancy between loan and category balances.
    • Two reports will generate:
      • CC5002P – Unbalanced Credit Card Loans: Shows transactions posted to one side (category or loan) but not the other.
      • CC5003P – Unallocated Credit Card Loans: Shows transactions where the system could not determine the correct category.
    • Action Required: Any accounts listed on these reports MUST be corrected before the billing cycle can be successfully run. Contact FLEX Support for assistance with corrections. These reports can also be run manually for verification prior to the billing cycle.
  • “There are loans that exist with a negative balance.”
    • This is a warning message only; it does not prevent the cycle from running.
    • A report of these accounts will be produced.
    • Action: Review the report. No immediate action is required for the cycle to proceed. Credit union procedure may dictate advancing negative amounts into another suffix on the member’s account.

5. Credit Card Control Parameters

Users should review and configure Credit Card Control Parameters, especially when new to credit card loans or if loan terms have changed.

Navigation:

  • From the FLEX Main Menu, select Control Parameters under the Credit Card Configuration menu.

5.1. Billing Cycle Options

  • Last Billing Date: Displays the date the last billing cycle was processed.
  • Max Days Delinquent For Processing/Statements:
    • First Field: Maximum days delinquent to stop charging fees and interest.
    • Second Field: Maximum days delinquent to no longer produce a statement.
  • Exclude Unpaid Interest From Average Balance:
    • Y: Unpaid interest is excluded from average balance calculation.
    • N: Unpaid interest is included.
  • Post Late Fees During Billing Cycle:
    • Y: Late fees are collected during the end-of-period billing cycle.
    • N: Late fees are not collected during the billing cycle; they are collected within transaction entry at the time of payment.
  • Consider Grace In Current Billing Cycle Only:
    • Y: Checks only the current period. If payments within the grace period equal or exceed the statement’s ending balance, no finance charge applies to categories with a grace period.
    • N: Checks the prior statement period. If the loan has been carrying a balance, finance charges will be incurred even if payments are made within the grace period.
  • Grace By Entire Loan:
    • Y: Grace periods affect only the specific category for which grace is calculated.
    • Blank or No: If any category is within its grace period, all categories will be treated as if they are not in grace (i.e., interest may be collected for all). This is the default.
  • Discontinue Over Limit Fee After:
    • Indicates the maximum number of consecutive months an over-limit fee will be collected without new advances.
    • Valid Values: 1 through 99. (Refer to Regulation Z Section 226.56 for compliance.)
  • Minimum Days Loan Open Before Variable:
    • Number of days a credit card loan must be open before variable rate loan adjustments process.
    • Valid Values: 0 through 9999.
  • Purchase Return End-Of-Period Crossover Days:
    • Number of days after an end-of-period within which purchase returns are considered to have occurred before the end-of-period. This reduces required payments to avoid finance charges.
    • Valid Values: 0 through 9.
  • Maximum Fees Charged In First Year:
    • Maximum portion of the credit limit for which fees can be charged in the first year. Excess fees are refunded in the following billing cycle.
  • Include Inactive Accounts In Cycle:
    • Y: Inactive accounts (no activity, zero balance) will receive statements.
    • N: Inactive accounts will not receive statements. (Default)

5.2. Credit Card Loan Entry Options

  • CD Suffix Class:
    • Indicates the type of card record created when using Credit Card Loan Setup. These are configured by FLEX.
    • Blank: Uses FSRD and conditionally AICD and ATCD.
    • 1 to 9: Uses the CDCD card file and loads the 1-9th suffix class with the credit card loan suffix.
  • Forms Prompt:
    • Y: Displays a prompt to print forms after credit card creation.
    • Blank or No: Does not prompt for forms.

5.3. General Ledger Accounts

  • Over Limit Fee: General ledger account number for over-limit fees.
  • Cash Advance Fee: General ledger account number for cash advance fees.

5.4. Statement Printing Options

  • Statement Sequence Code: Determines the printing order of statements.
    • 1: Based on loan creation order.
    • 2: Account/Suffix order.
    • 3: ZIP Code order.
    • 4: Member name order.
    • 5: Mail code order.
  • C.A.S.S. Certification:
    • Y: Pre-sorts statements into CASS certified and non-certified groups (requires purchasable CASS program).
    • N: Does not pre-sort.
  • Print Mail Code:
    • Y: Prints Credit Union defined mail codes on statements.
    • N: Does not print mail codes.
  • Activate Corporate Grouping:
    • Y: Prints detail and summary sets of statements based on grouping rules.
    • N: Does not print grouped statements.
    • D: Prints detail group statements only.
    • S: Prints summary group statements only.
  • Print DFI Warning Message:
    • Y: Prints the mandated DFI warning message on statements for members in DFI warning states.
    • N: Does not print the DFI warning message.
  • Print & Character By Name:
    • Y: Prints the ampersand character to the left of member names (for certain statement printers).
    • N: Does not print the ampersand character.
  • Print Joint Owner Name:
    • Y: Prints the name of the first joint owner below the member’s name.
    • N: Does not print the joint owner’s name.
  • Adjust Payment Description:
    • Y: Changes default payment history descriptions (LOAN PAYMENT, PAYMENT – NO INT, LOAN CREDIT) to ‘Payment – Thank You’. Modified descriptions entered by tellers are unaffected.
    • N: History descriptions are not changed.
  • Due Date Print Code: Determines how the payment due date prints for delinquent loans.
    • 1: Due dates show ‘PAST DUE’.
    • 2: Due dates show the payment due date following the current statement date.
    • 3: Due dates show the payment due date following the current statement date, and ‘PAST DUE’ accompanies the due date at the top of the statement.
  • Print Overlimit Fee Opted In Notice:
    • Y: Includes a notice of consumer’s affirmative consent for an over-limit fee on the first statement after the over-limit fee code is changed to ‘Y’.
    • N: Does not include the notice.
  • Generate Payment Disclosure Boxes:
    • Y: Generates lined boxes around the payment disclosure on the statement.
    • N: Does not generate boxes.
  • Print Form Overlay:
    • Y: Includes non-statement form information in generated statements (necessary for in-house printing or FLEX printing contracts).
    • N: Does not include the form overlay (typically used when a third party prints statements).
  • Print VISA® Logo:
    • Y: Prints the VISA logo on the statement. (Do not include if not printing the form overlay.)
    • N: Does not print the logo.
  • X/Y Offsets Logo 1 (and Logo 2):
    • Adjusts the position of VISA logos on the statement.
    • Logo 1 Default: Below and to the left of the member’s name.
    • Logo 2 Default: Above and to the right of the member’s name.
    • Increase number to move right, decrease to move left.
    • Offset Unit: Points (1 inch ≈ 300 points).
    • To exclude a logo, set both X and Y offsets to -999.
    • Valid Values: 0 through 999 and -999.
  • Print Tran Highlighting Lines:
    • Y: Prints transaction highlighting lines when the form overlay is printed.
    • N: Does not print lines.
  • Detach Message X / Y Positions:
    • Controls the position of the “Detach Top Portion And Return With Your Payment” message when the form overlay is printed.
    • X Position: Horizontal (1-1700, recommended 190). Higher number moves message to the right.
    • If both X and Y positions are 0, the message will not print.
  • Prevent Barcode From Printing:
    • Y: Prevents the ZIP code barcode from printing when the form overlay is printed.
    • N: Allows the barcode to print.
  • Account Number Mask:
    • Allows masking of the account number on the statement. Enter a replacement character (e.g., ‘X’) in positions to be masked.
  • XML Exit Program: For FLEX use only.

5.5. Statement Messages and Notices (F8 and F9 Function Keys)

F8=Statement Messages: Allows adding/editing default, grace, delinquency, and loan-type specific messages.

  • Default Message: Customizable message.
  • Grace Delinquency Message: Customizable message.
  • Statement Message By Loan Type:
    • Use F6=Add to add a new message by loan type.
    • Options: C (Copy), D (Delete), S (Select).

F9=Statement Notices: Configures custom credit card notices to be sent on the statement.

  • List of Notices:
    • ANNUALFEE (Annual Fee Disclosure)
    • CCOUNSEL (Credit Counseling Services Message)
    • LATEPAY (Late Payment Warning)
    • MINPMTWARN (Minimum Payment Warning)
    • OLFEEOFTDI (Over-Limit Fee Opted-In Notice)
    • OVERLIMIT (Over-Limit Fee Opt-Out Notice)
  • Editing a Notice: Type S in the Opt line for the desired notice and press Enter.
  • Each notice has a customizable Heading and Message.

6. Credit Card Billing Cycle Reports (Post-Processing)

The following reports are automatically generated after the monthly credit card billing cycle has been processed:

  • Credit Card Fee and Interest Detail: Provides a breakdown of all fees and interest charged per member account for the current billing cycle.
  • Credit Card Fee and Interest Summary: Shows total amounts of fees and interest accrued for each individual loan type, including the general ledger where income will post.
  • Credit Card Late Payment Fees: Lists all credit card loans charged late fees during the current billing cycle.
  • Category Expiration/Delinquency Action Report: Identifies expired categories and indicates if action is needed on delinquent credit card loans.
  • Average Balances for Credit Card Categories: Displays the average balance breakdown for all credit card loans during the billing cycle period.
  • Negative Category Credit Card Loans: Shows all credit card loan categories with a negative balance.
  • Unbalanced Credit Card Loans (CC5002P): Lists credit card loans with unbalanced transactions (posted to category side but not loan side, or vice versa). This report is uncommon; contact FLEX Support if transactions are listed.
  • Unallocated Credit Card Loans (CC5003P): Lists credit card loans with unallocated category transactions (system unsure of category). This report is uncommon; contact FLEX Support if transactions are listed.