In-House Credit Cards – Set-Up

Lending Lending In-House Credit Cards - Set-Up

1. Introduction

The In-House Credit Cards module within the FLEX system enables credit unions to manage their credit card portfolios directly, eliminating the need for third-party processing. This involves setting up individual loan types for credit cards and generating their own statements. This module is often referred to as “Pass Thru Credit Card Processing.”

2. Loan Type Configuration for Credit Cards

Credit cards require their own dedicated loan type configuration, built upon basic loan type information.

2.1. Accessing Type Configuration

Type Configuration is found under System Administration, General Configuration in the FLEX Main Menu:

  1. Navigate to System Administration.
  2. Expand General Configuration.
  3. Select Type Configuration.

2.2. Key Configuration for Credit Card Loan Types

  • Group Code: Credit cards must be set up using Group Code V (Credit Card).
  • Loan Values:
    • Maximum Loan Amount: (e.g., 0.00)
    • Group Code: V Credit Card
  • Payment Values:
    • Pay Ahead Limit Days: Indicates the maximum number of days this loan type may be paid ahead. If a large payment is made, the system will not advance the due date beyond this limit.
    • Payment Due (Day of Month): If all loans of this type are due on the same day, enter that day here. 0 indicates no set day. The payment due date for credit cards should account for the billing cycle.
    • Min Days to Advance Zero Bal Loans: For LOC loans, this option advances the due date on loans that previously had a zero balance to prevent them from appearing delinquent. The default value is 25 days.
      • Example: If a LOC loan was paid off in February (due date 2/25) and a new advance occurs in May, the system will automatically advance the next due date to 5/25 at the time of the advance.
    • Allow Debits Thru Tran Entry: Indicates if debits to this loan type will be allowed through transaction entry.
    • Include Late Fee in Due Date Adv:
      • Yes: Any late fees due will be taken from the scheduled payment, and the due date will be advanced.
      • No: The scheduled payment PLUS the late fee will need to be collected for the due date to advance.
      • Note: Settings here may be overridden by the memo code field defined in late charge configuration, if used (the memo code is looked at first).

2.3. Fee Defaults

  • Cash Advance Fee: If checked, the loan type may be subject to a cash advance fee.
  • Late Charge: If checked, the loan type may be subject to a late charge.
  • Late Charge Method: Indicates the method code used for calculating the late fee. The method code calculation is defined through Late Charges under FLEX Configuration.
  • Fixed Amount: If the late fee is a fixed amount, enter the amount here.
  • Recommendation: FLEX recommends that credit cards have their own late charge method, as these fees are posted in batch. (Refer to Late Charge documentation for additional information).

2.4. Payment Recalculation

  • Refer to Type Configuration documentation for full details on payment recalculation fields.
    • Recalculation Method: (e.g., P – Percentage of Balance)
    • Minimum Payment Amount: (e.g., 25.00)
    • Round Payment Up To: (e.g., 0.01)
    • Consider Conversion Date As Advance: (Checkbox)
    • Percentage of Balance: (e.g., 2.000%)
    • Maximum Term in Months: (e.g., 0)
    • Adjust To Payment Frequency: (Checkbox)
    • Use Recalculation In Loan Processing: (Checkbox)
    • Create Change Of Payment Notices: (Checkbox)
    • Do Not Allow Payment Decrease On Recalculate: (Checkbox)
    • Variable Rate Only Parameters:
      • Change Pmt In Var Rate Adjustment: (Checkbox)
      • Only Change If Rate Changes: (Checkbox)
      • Alternate Recalculation Method: (Dropdown)
      • Alternate Method If New Advance(s): (Dropdown)
      • Ignore Pre-Notice Payment Notice: (Checkbox)
      • Ignore Pre-Notice Rate: (Checkbox)
      • 0 Pmt For 0 Bal Loans In VR Calc: (Checkbox)
      • Effective Date Back To Int Calc Date: (Checkbox)

3. Maintain Categories – Global Configuration

This option allows users to create new categories or make changes to global category information such as interest rate, grace period, and expiration.

3.1. Accessing Global Category Parameters

There are two menu options for maintaining categories. The global option is found under Credit Card Loan Configuration:

  1. Navigate to Cards.
  2. Expand Configuration.
  3. Expand Credit Cards.
  4. Expand Credit Card Configuration.
  5. Select Maintain Categories.

3.2. Credit Card Loan Category List (CC1010S)

This screen lists all current categories.

  • Opt Column:
    • S: Select to edit an existing category.
    • D: Delete an existing category.
  • F6: Add a new category.
  • Columns: Category, Definition (Description).

3.3. Credit Card Loan Category Maintenance (CC1011S)

When editing or adding a category, you configure the following:

3.3.1. General Information

  • Category: Displays the category number and description.

3.3.2. Finance Charges

  • Grace Days: Number of days from the billing cycle before finance charges are added to the category. If the entire statement balance is paid before the grace period expires, finance charges will not be posted.
  • Category Interest Rate: Displays the default interest rate for the category.

3.3.3. Payments

  • Payment Priority: Indicates the priority used for the order statement balances are paid.
    • S: Statement balance is used.
    • P: Current payoff amount is used.
  • Exclude From Required Payment: Indicates whether to include the category balance in the required minimum payment calculation.
    • Y: Exclude from payment calculation.
    • N: Do not exclude.

3.3.4. Advance Fee

  • Fee Code: Displays the fee code indicating the method for cash advance fee calculation.
    • N: No fee is collected.
    • P: A fee is collected based on a percentage of the advance.
    • F: A fixed fee is collected.
    • C: Use the fee code from the category configuration record.
  • Fixed Fee Amount: Displays the fixed fee amount if the advance fee code is F.
  • Fee Percentage: Displays the percentage to be applied if the advance fee code is P.
  • Minimum Fee: Displays the minimum advance fee.
  • Maximum Fee: Displays the maximum advance fee.

3.3.5. Credit Limit

  • Exclude From Limit: Indicates whether the balance in the category is included in credit limit calculations.
    • Y: Excludes this category’s balance.
    • N: Includes this category’s balance.

3.3.6. Defaults

  • Bonus: Indicates if the category is used for calculating an interest rebate bonus.
    • Y: Category is eligible for bonus.
    • N: Category is not eligible for bonus.
  • Variable Rate Group: Displays the default variable rate group for the category.
  • Expiration Date: Displays the default expiration date for the category. All categories except category 01 can be set to expire. Expired categories can either have their interest rate changed or their balance transferred to another category during the first billing cycle immediately following the expiration date.
  • Expiration Calculation: Displays the default expiration calculation for the category.
  • Expiration Frequency: Displays the default expiration frequency for the category.
    • D: Days
    • W: Weeks
    • M: Months
    • Q: Quarters
    • Y: Years
  • Action (Expiration): Indicates the default action to be performed on the first billing cycle after the category expires.
    • C: Change the category.
    • R: Change the interest rate.
  • New Category (Expiration): Displays the default new category for balance transfer if action C is taken.
  • New Rate (Expiration): Displays the new rate the category will be set to if action R is taken.
  • Maximum Days Delinquent: Displays the default maximum delinquent days allowed for the category. Categories can be configured to automatically modify if the loan becomes delinquent. All categories except category 01 can be set to another category or have their interest rate changed. This takes place during the billing cycle immediately after the loan exceeds the maximum delinquency days.
  • Action (Delinquency): Indicates the default action to be performed to a loan that exceeds maximum delinquency days.
    • C: Change the category.
    • R: Change the interest rate.
  • New Category (Delinquency): Indicates the new category for balance transfer if action C is taken.
  • New Rate (Delinquency): Indicates the new rate if action R is taken.

4. Maintain Credit Card Loan Types – Global Settings

This option allows the credit union to create or edit global settings for Credit Card Loan Types, including finance charges, late charges, over-limit fees, and categories.

4.1. Accessing Maintain Credit Card Loan Types

Maintain Credit Card Loan Types is found under Cards, Credit Cards, and Credit Card Configuration in the FLEX Main Menu:

  1. Navigate to Cards.
  2. Expand Configuration.
  3. Expand Credit Cards.
  4. Expand Credit Card Configuration.
  5. Select Maintain Credit Card Loan Types.

4.2. Credit Card Loan Type List (CC1030S)

This screen lists all current credit card loan types.

  • Opt Column:
    • S: Select to edit an existing type.
    • C: Copy an existing type.
    • D: Default Categories.
  • F6: Add a new credit card loan type.
  • Columns: Type, Description, Included Categories.

4.3. Credit Card Loan Type Configuration (CC1031S)

When editing or adding a loan type, you configure the following:

4.3.1. Finance Charges

  • Minimum Balance: Displays the minimum balance used to calculate finance charges.
  • Minimum Charge: Displays the minimum finance charge for this loan type. If a calculated finance charge falls below this, the minimum amount entered here will be charged.

4.3.2. Late Charges

  • Category: Displays the category to which late fees will be posted.
  • Reduce Fee to Payment Amount: Indicates whether the late fee should be reduced to the payment amount if the fee is greater.
  • Repeated Violation Frequency and Term: Displays the frequency and time frame that repeated late fee violations can incur before switching to an alternate late charge method.
  • Alternate Late Charge Method: Displays the new method for charging late fees once the repeated violation limit is exceeded.

4.3.3. Miscellaneous Control

  • Payment Sequence Code: Displays the order in which payments will be applied to categories of this loan type (industry standard: highest interest categories paid first).
  • Default Debit Category: Displays the category to which debits to the loan type will be posted unless another category is specified.

4.3.4. Annual Fee

  • G.L.: Displays the General Ledger account the annual fee posting will offset to.
  • Category: Displays the category the annual fee will be posted to.

4.3.5. Overlimit Fee Control

  • Fee Code: Indicates the fee method code used to calculate over-limit fees.
    • F: Fixed Fee Amount
    • P: Based upon a percentage of the over-limit amount
    • N: No over-limit fees will be charged
  • Fee Percentage: Displays the percentage used to calculate the over-limit fee (if Fee Code is P) or the fixed fee amount (if Fee Code is F).
  • Minimum Fee: Displays the minimum fee amount charged when the fee is based on a percentage.
  • Maximum Fee: Displays the maximum fee amount charged when the fee is based on a percentage.
  • Grace Amount: Displays the maximum fixed amount a loan may exceed the credit limit before an over-limit fee is charged.
  • Grace Percentage: Displays the maximum percentage a loan may exceed the credit limit before an over-limit fee is charged.
  • Adjust Payment: Indicates whether the payment amount will be adjusted when the loan exceeds the credit limit.
    • Y: Payment amount will be increased by the amount exceeding the credit limit.
    • N: Payment amount will not be adjusted.
  • Reduce Fee to Overage: Indicates whether the over-limit fee amount will be reduced to the amount that exceeds the credit limit if the amount is less than the minimum over-limit fee.
    • Y: Over-limit fee amount will be reduced.
    • N: Over-limit fee amount will not be reduced.
  • Category: Displays the category to which the over-limit fee will be posted.
  • Violation Frequency and Term: Displays the frequency and time frame that repeated violations can be charged before changing to an alternate over-limit fee.
  • Fee Code (Violation): Displays the frequency and time frame that repeated over-limit fee violations can incur before switching to an alternate over-limit fee.
  • Fixed Fee Amount (Violation): Displays the new fixed amount of the over-limit fee once the repeated violation has been exceeded.

4.3.6. Credit Insurance Posting

  • Category: Displays the category to which Credit Insurance will be posted, if applicable.

4.3.7. Skip Payments

  • Skip Month: Displays the month of the year the member is allowed to skip a monthly payment.
  • Delinquency Days: Displays the maximum amount of delinquent days allowed when considering a skip payment for this loan.

4.3.8. Defaults

  • Annual Fee Amount: Displays the default annual fee amount to be charged for all new credit card loans.
  • Annual Fee Month: Displays the default month an annual fee will be charged for all new credit card loans.
  • Overlimit Fee Code: Displays the default annual fee code for all new credit card loans.

5. 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.