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# Business Model: Exponential DECREASE in credit limit of credit card as purchase frequency increases.

IP.com Disclosure Number: IPCOM000014447D
Original Publication Date: 2001-Aug-01
Included in the Prior Art Database: 2003-Jun-19
Document File: 1 page(s) / 41K

IBM

## Abstract

Business Model: Exponential DECREASE in credit limit of credit card as purchase frequency increases. The proposed idea is a business model method for an algorithm that improves credit card security. The proposal is for the user and the financial institution that controls a user's credit card to have a security agreement for special circumstances. In this agreement, the user and the bank would agree to a type of inverse-exponential-limit option to the credit card limit. This special agreement goes counter to the typical user's behavior when dealing with credit limits. Typically, the user may need to have the credit card limit raised by the bank during times of heavy purchasing. However, the special case described in this business mode is one in which the speed of the transaction occurrences causes the credit limit to quickly start shrinking. Specifically, the faster the credit card is used, in a reversed exponential factor, the credit card limit of the card is reduced. The example is as follows: A user is about to go on a vacation. The user contacts the card issuer, either through the phone or through their personalized web site. The user tells the bank that they would like to go into the special security mode. The mode states that if the user is used more than N times with X minutes, the credit limit will drop by Y percent. So the user enters N=2, X=30, and Y=50. Thus, if the card is used more than twice in a thirty minute period, the credit limit will drop by fifty percent. The user then goes on vacation or a business trip and has his/her wallet stolen in a crowd. Or, the card number is stolen by the wait staff at a restaurant and sold on the internet by the thieves. The typical behavior of card thieves is to purchase as much real merchandise as possible before the credit card holder realizes the theft and informs the bank that the card should be considered stolen and disabled. However, this realization and the speed of contacting the card issuer does not typically happen in a fast and easy method.

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Business Model: Exponential DECREASE in credit limit of credit card as

purchase frequency increases.

The proposed idea is a business model method for an algorithm that improves credit card security. The proposal is for the user and the financial institution that controls a user's credit card to have a security agreement for special circumstances. In this agreement, the user and the bank would agree to a type of inverse-exponential-limit option to the credit card limit. This special agreement goes counter to the typical user's behavior when dealing with credit limits. Typically, the user may need to have the credit card limit raised by the bank during times of heavy purchasing. However, the special case described in this business mode is one in which the speed of the transaction occurrences causes the credit limit to quickly start shrinking. Specifically, the faster the credit card is used, in a reversed exponential factor, the credit card limit of the card is reduced. The example is as follows:

A user is about to go on a vacation. The user contacts the card issuer, either through the phone or through their personalized web site. The user tells the bank that they would like to go into the special security mode. The mode states that if the user is used more than N times with X minutes, the credit limit will drop by Y percent. So the user enters N=2, X=30, and Y=50. Thus, if the card is used more than twice in a thirty minute period, the credit limit will drop by fi...