Multicriteria Decision Aid in Credit Cards Assessment

Abstract

Credit cards constitute one of the most common forms of credit, which is mainly used by consumers to cover their daily expenses. The increasing demand for credit cards during the last two decades, has necessitated the development of evaluating systems to reduce the credit risk. Generally, decisions regarding credit card evaluation involve the acceptance or the rejection of a credit card application on the basis of the applicant's personal and business profile, which is usually described through both quantitative and qualitative factors. The objective of this paper is to present the application of multicriteria decision aid (MCDA) in credit card evaluation. For this purpose, three preference disaggregation methodologies are applied in a sample consisting of 150 credit card applications which were submitted for consideration to the National Bank of Greece during the period 1995-1996.