Even for those credit unions not interested in selling off credit card portfolios, it’s advisable to keep them attractive in case the time arises to sell them. Valuing a credit card portfolio can be a thorny situation. We’ve found a list of six red flags that should help identify problems as soon as they arise so you can better track the pulse of your portfolios.

According to card advisor Robert Hammer here is a list of potential problems:

1. Cash advance use as a percentage of total booked loans.

Non-purchase draws against a card are high risk. That’s why credit unions and other financial institutions have higher interest rates attached to them. If less than 15% of a loan portfolio is from cash advances, that is considered to be a low risk. However, once that percentage reaches 25% or higher, it becomes a high risk.

2. Certain changes in card policies.

Any change that loosens controls is considered bad news no matter what management presents as the rationale for it.

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