In-House Credit Cards – Loan Processing

Lending Lending In-House Credit Cards - Loan Processing

1. Introduction

This document provides technical guidance on processing In-House Credit Card loans within the FLEX system. It covers the workflow from new loan creation to managing various transaction codes and payment reversals, ensuring proper handling of credit card specific functionalities.

2. Loan Processing Overview

Loan Processing for in-house credit cards integrates specific steps tailored to credit card functionalities, such as category management and specialized transaction codes.

2.1. Accessing Loan Processing

Loan Processing can be found under Loans in the FLEX Main Menu:

  1. Navigate to Loans.
  2. Select Loan Processing.

2.2. Creating a New Credit Card Loan

When creating a new credit card loan:

  1. Select Loan Type and Suffix: On the “Loan Processing – Type/Suffix Selection” screen, select the correct loan type for the credit card.
  2. The loan processing workflow will automatically add applicable steps needed for a credit card loan, as the loan type is set up as a credit card.

2.3. Loan Processing Workflow Steps

The typical workflow for credit card loan processing includes:

  • Account Selection
  • Loan Selection
  • Type/Suffix Selection
  • Credit Loan Entry
  • Credit Card Categories
  • Loan Disclosures
  • UDFs (User Defined Fields)
  • Collateral Selection
  • Distribution Selection
  • Printing Selection

2.4. Default Information Carry-Over

All information configured in the Credit Card Loan Type (e.g., late fees, over-limit fees, cash advance fees, annual fees, payment due dates) will carry over by default. This information can be changed on an individual loan level if applicable.

3. Loan Processing – Credit Card Loan Setup

This screen allows for detailed configuration of the credit card loan.

3.1. Loan Information

  • Type: Displays the loan type (e.g., VP – VISA CREDIT CARD).
  • Purpose Code: Displays the purpose code.
  • Security Code: Displays the security code.
  • Credit Limit: Enter the credit limit for the card.
  • Payment Method: Select the payment method (e.g., Cash Payment).
  • Loan Officer: Select the assigned loan officer.
  • Over Limit Fee: Indicate Yes/No if an over-limit fee applies.
  • Late Payment Fee: Indicate Yes/No if a late payment fee applies.
  • Cash Advance Fee: Indicate Yes/No if a cash advance fee applies.
  • Annual Fee: Enter the annual fee amount.
  • Annual Fee Month: Enter the month the annual fee is charged.

3.2. Payment Information

  • Next Payment Date: Set the next payment date.
  • Payment Amount: Enter the payment amount.

3.3. Credit Score Info

  • Recent Scores: Displays recent credit scores.
  • CB Score: Displays the credit bureau score.
  • CB Grade: Displays the credit bureau grade.

3.4. Insurance Information

  • Insurance Eligible: Indicate Yes/No.
  • Disability Type, Disability Plan, Life Type, Life Plan: Select applicable insurance options.

3.5. Debt Cancellation

  • Debt Cancellation Type, Debt Cancellation Plan, Source Suffix: Select applicable debt cancellation options.

3.6. Late Charge Information

  • Late Charge Method: Displays the late charge method.
  • Fixed Amount: Displays the fixed late charge amount.

4. Loan Processing – Categories Loan Setup

This step verifies and allows modification of categories for the credit card loan.

  • Categories set up in Credit Card Type Configuration will carry over by default.
  • Categories may be added, changed, or deleted on an individual basis.
  • All Categories: Lists available categories.
  • Selected Categories: Lists categories assigned to the loan, with Current Rate.

5. Card Ordering

After the loan is posted, cards may be ordered.

  • Prompt: You will be asked, “Would you like to add a card to this credit card loan now?”
    • Select Yes to add a card immediately.
    • Select No if card(s) will be ordered later through Card Maintenance.
  • Add Card Screen: If “Yes” is selected, choose the appropriate Card Type and enter applicable information needed in Card Maintenance. Click Save.

6. Credit Card Transaction Codes

Tellers primarily use standard transaction codes for credit card payments, but specific instances may require different codes.

6.1. Credit Transaction Codes (Payments/Credits)

  • Transaction Code 06 (Loan Payment Code): Used with cash or check payment transactions.
  • Transaction Code 16 (Loan Credit Transfer Code): Used when taking payment funds from a member’s share/draft suffix or a general ledger.
    • A checkbox “Apply toward the required payment” will appear.
      • If checked, the payment amount is applied as a payment to credit card categories.
      • If unchecked, the amount is considered an adjustment and applied towards the member’s required payment.
    • Recommendation: For credits due to incorrect late charges, over-limit fees, or finance charges, leave the box checked and use an appropriate effective date. For merchant or purchase returns (credit adjustments), it is recommended to uncheck the box.

6.2. Credit Card Debit Category Allocation Codes (Credits to Specific Categories)

These codes are less frequently used and may be restricted in Teller Configuration. They are typically used for crediting a credit card loan for an incorrect late fee, over-limit fee, or finance charge from a general ledger account. They require the teller to allocate funds to specific categories.

  • Transaction Code 46 (Credit Card Category Allocation Payment Code): Used with cash or check payment transactions.
  • Transaction Code 56 (Credit Card Category Allocation Loan Credit Transfer Code): Used when taking payment funds from a member’s share/draft suffix or a general ledger.
    • Allocation Process: The teller can select to send crediting funds to one or multiple categories. Select the appropriate category from the dropdown, enter the Decrease Amount, and click Add until all funds have been credited.
    • Example: Splitting an additional payment between purchase and cash advance categories.

6.3. Credit Card Debit Transaction Codes (Debits/Advances)

These codes are used for debiting a credit card loan. The system typically debits the default category (e.g., Cash Advance).

  • Transaction Code 10 (Cash Advance): Automatically debits the cash advance category for an advance.
  • Transaction Code 11 (Check Advance): Automatically debits the cash advance category for an advance.
  • Transaction Code 19 (Loan Debit Transfer Code): Requires the advance to be put into a member share, draft suffix, or general ledger, and automatically debits the cash category for the advance.

6.4. Credit Card Debit Category Allocation Codes (Debits from Specific Categories)

These codes are infrequently used and may be restricted. They are typically used after a loan has been posted, especially during balance transfer promotions. They require the teller to select a category other than Cash Advance when debiting the credit card loan.

  • Transaction Code 50 (Credit Card Category Allocation Cash Advance): Used with cash advances.
  • Transaction Code 51 (Credit Card Category Allocation Check Advance): Used with check advances.
  • Transaction Code 56 (Credit Card Category Allocation Debit Transfer): Used when transferring to a credit share, draft, or general ledger account.
    • Allocation Process: The teller can select to send debiting funds to one or multiple categories. Select the appropriate category from the dropdown, enter the Increase Amount, and click Add until all funds have been debited from the chosen categories.
    • Example: Cash advance to pay off another credit card, utilizing a balance transfer promotion.

7. Credit Card Payment Reversal

It is crucial to use the correct transaction code and effective date when reversing a credit card payment to ensure accurate balance updates and Average Daily Balance calculations for the End-of-Month Cycle.

  • Always use Transaction Code 49 for Credit Card Payment Reversal. Using an 09 Payment Reversal code will NOT correctly reverse the payment and can lead to issues with the Credit Card End-of-Month Cycle.
  • Effective Dating: Effective dating the payment reversal to the date of the original transaction or the last cycle date is essential. This ensures the system correctly updates category balances and impacts the Average Daily Balance calculation, preventing incorrect fees and finance charges.

7.1. Reversal Process

  1. Locate Payment: Through the member’s history, locate the payment to be reversed and double-click it.
  2. Credit Card Categories Tab: Select the “Credit Card Categories” tab to view the original allocation of the payment across categories. Retain this information.
  3. Enter Transaction: Enter the transaction information using Transaction Code 49. If using an effective date, ensure it is changed accordingly.
  4. Allocate Funds: The teller must then designate how to debit funds out of the credit card loan by debiting one or multiple categories. Use the information gathered from the member’s history to correctly reverse how the payment was applied.
    • Select the Category from the dropdown.
    • Enter the Increase Amount (for the reversal).
    • Click Add until all funds have been allocated.

8. Confidentiality Notice

This document is published by Computer Marketing Corporation/FLEX and is intended solely for its contracted clients. It may contain information that is privileged, confidential, or otherwise protected from disclosure. Dissemination, distribution, or copying of this document and any accompanying attached information by someone other than the intended recipient(s), or an employee or agent acting on behalf of the intended recipient, is strictly prohibited.