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Consumer Credit

Overview

Consumer credit card products require account holders to make a minimum payment by their billing cycle due date and allow you to assess interest charges on their revolving balances. For credit card products not supported by an account holder's secured deposit, you must provide adequate capital to your customers based on the extended lines of credit, either on your behalf or through a debt facility.

Highnote also offers a credit processing-only feature that allows you to utilize the Highnote platform to fund credit products on-demand, bypassing full ledger capabilities and repayment services. For more information on the credit processing-only feature, contact support@highnote.com.

This guide provides an overview of how to create and setup a consumer credit card product in the Test Environment. In the Live Environment, the Highnote team will assist with creating your card product.

Create Credit Card Product

You can create a consumer credit card product using the Highnote Dashboard or by using the following mutation with the Highnote API. When creating your card product via API, use CONSUMER_CREDIT as the vertical input variable:

Add Credit Feature

After creating a CONSUMER_CREDIT card product, use the following mutation to add the REVOLVING feature. This feature enables minimum payment terms and and the revolving balance capabilities for financial accounts:

View Credit Features

You can access the credit-related settings on your card product by using the GetCardProductWithCreditConfigs query. In the Test Environment, consumer credit card products are automatically assigned the settings outlined in the following table by default. You can adjust these settings based on your card product's requirements in the Live Environment.

Credit ConfigurationDescriptionTest Environment Default Setting
delinquentInDaysThe financial account is considered delinquent based on your card product’s policy; no restrictions have been placed on the financial account. A DELINQUENT financial account attribute is added.totalDaysDelinquent >= 30 days
suspendedInDaysThe financial account is excessively delinquent based on your card product’s policy, and the financial account’s status is SUSPENDED; future authorizations are blocked on all associated payment cards. A DELINQUENT_SUSPENDED financial account attribute is added.totalDaysDelinquent >= 90 days
chargeOffInDaysThe financial account is excessively delinquent based on your card product's policy, and the financial account’s status is SUSPENDED; future authorizations are blocked on all associated payment cards, and the account is in the process of closing. A CHARGE_OFF financial account attribute is added.totalDaysDelinquent >= 180 days
minimumPaymentThe minimum payment is the greater of $25 or 1% of the statement balance plus interest charges, fees, and any past due amount. If the balance is less than $25, the minimum payment is equal to the statement balance.percentage = 1%, thresholdAmount = $25

Use the following query to view credit features:

Fund Your Product Funding Financial Account

In the Test Environment, you can simulate depositing funds into your product funding account. Your product funding account funds your consumer credit card products and authorize purchases on financial accounts' credit limits.

Simulating deposits doesn't require connecting an external bank account. Before initiating a deposit, you must find your product funding account ID.

Use the following query to find your product funding account ID:

Initiate a Wire Deposit

With your product funding financial account ID, you can carry out a simulated WIRE deposit in the Test Environment using the following mutation:

Credit Plans

Credit plans allows you to meet unique needs of your account holders by providing flexible and configurable terms on credit card products. Credit plans define the following:

  • Interest rate
  • Interest rate type
  • Interest accrual method
  • Pricing and policy terms for specific balance types

You can create credit plans in the Test Environment to test your card product. For more information on creating credit plans, see Create Credit Plans. The Highnote team will create credit plans for your card product in the Live Environment.

Create an Account Holder

Your credit policy will dictate the collection of data required to issue a line of credit. Some credit policies require more data than the totalAnnualIncome and currentDebtObligations.

When you create an account holder for a consumer credit card product, there are creditRiskAttribute fields that you can provide as inputs to a credit application.

Prior to issuing a line of credit, you should collect totalAnnualIncome and currentDebtObligations from your applicants. There are two recommended methods for collecting this information:

  • Collect from the account holder when they are completing their application.
  • Update the account holder with the necessary details after they've submitted their application.

Use the following mutation to create an account holder for a consumer credit card product:

Enable Collaborative Application Decisioning

Before opening an application, you must enable collaborative application decisioning on your card product. Collaborative application decisioning empowers you or your underwriter to provide a recommended APPROVED or DENIED application decision based on your credit policy. Highnote will execute regulatory checks against the application, such as KYC, KYB, and OFAC, and use your recommended decision to determine a final application decision.

You can enable collaborative application decisioning through your product's settings on the Highnote dashboard, or via the API using the following mutation:

Open an Application

After enabling collaborative application decisioning, you can create an application. When an application is submitted, it triggers an application decision request, which you can respond to with an APPROVED or DENIED decision. For more information on receiving and responding to application decisioning requests, see Collaborative Application Decisioning.

In some cases, additional documents may be required to approve an application. For more information on collecting additional documents, see Request Documents for Application Review.

Use the following mutation to open an application for an account holder:

Issue Financial Account

With an APPROVED application, you can create a financial account by providing the applicationID in the following mutation:

Set or Change Credit Limit

Setting or updating a credit limit is an asynchronous process to ensure your ledger balances and validations are in check.

You can set or change a financial account’s credit limit by providing the financialAccountID and the new limit you want to assign to the financial account. It's essential to ensure that your product funding financial account holds funds equal to or exceeding any credit limits you extend to your financial accounts.

Issue a Payment Card

Once you have created a financial account with a credit limit, you can issue a payment card. By default, a payment card is a virtual card. After you issue a virtual payment card, you can create a physical card order if needed.

Scheduled Repayments

For card products requiring regular repayments, both automatic recurring and one-time payments can be used. To schedule repayments, an account holder needs to connect a verified, external bank account. Highnote offers secure options for account holders to validate their external accounts through Plaid and Finicity. For more information on connecting external accounts, see Connect External Accounts.

Once linked, account holders can easily transfer funds via ACH from their external bank account to their Highnote financial account to make repayments.

Create Recurring Payment Schedule

You can establish a automatic recurring payment schedule, enabling your customers to schedule payments on their monthly due date or on a customized calendar day. Recurring payment schedules are based on a point-in-time balance, such as outstanding balance, and the ACH transfer amount will be calculated on the scheduled date.

See the scheduled repayments guide for more information on managing, viewing, and canceling payment schedules.

Billing Statements

Highnote supplies the essential data for generating a statement for a financial account. You can use this data to fill in your statement template and then provide it to your customers.

Generate a Billing Statement

Highnote provides essential data for generating a billing statement for a financial account. You can create a billing statement template and use this data to provide billing statements to your account holders. For more information on billing statements, see Deliver Statements.

Billing statement data originates becomes available at the close of a billing cycle. Credit card products billing period end dates may vary across financial accounts. Typically, statement data is available within 48 hours after the billing period ends.

To retrieve the current amount due for your card product, reference the ConsumerRevolvingCardFinancialAccountStatementSnapshot. This balance can be presented to your customers outside of the billing statement, for example, on the account holder's Account page of your website or application.

Use the following query to find financial account information for generating a billing statement:

Simulate Delinquency

Highnote's delinquency simulator lets you view a financial account's current delinquency status and receivables by simulating past purchase and payment scenarios. In the Test Environment, this helps understand delinquency information and notification events.

You can utilize the delinquency simulator in the Highnote dashboard or reference the Simulate Delinquency guide for more information on using the Highnote API.

Simulate Repayment

Repayments may take up to 5 minutes to reflect on a Financial Account’s delinquency status.

You can simulate a repayment if your simulation results in a delinquent financial account. See Scheduled Repayments for more information.

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