By maintaining low credit limits the company is able to


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Heritage Financial Service aggressively issues credit cards to college students. By maintaining low credit limits, the company is able to limit the nonpayment losses typically attributed to first-time credit card holders. Angela Pearson, a current cardholder who has exhibited a good payment record, has requested her credit limit be raised from $500 to $3,000, noting she needs the higher limit to support the travel expenses inherent in her internship position with a national public relations firm.

You are the manager of the credit department and can justify increasing the limit to only $1,000. Prepare a letter informing Angela of your decision and suggesting that she take advantage of the company’s website to monitor her balance and schedule bi-monthly payments directly from her checking account. Make up the addresses and whatever details you need to complete this negative message.

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Operation Management: By maintaining low credit limits the company is able to
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