CLASSIFICATIONS OF CREDIT CARDHOLDER BEHAVIOR BY USING FUZZY LINEAR PROGRAMMING

Jing He (), Xiantao Liu (), Yong Shi (), Weixuan Xu () and Nian Yan ()
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Jing He: Institute of Systems Science, Academy of Mathematics and Systems Science, The Chinese Academy of Sciences, Beijing 100080, China
Xiantao Liu: School of Business Administration, Southwest Petroleum Institute, Chengdu, Sichuan 610500, China
Yong Shi: College of Information Science and Technology, University of Nebraska at Omaha, Omaha, NE 68182, USA
Weixuan Xu: Institute of Policy and Management, Chinese Academy of Sciences, Beijing 100080, China
Nian Yan: College of Information Science and Technology, University of Nebraska at Omaha, Omaha, NE 68182, USA

International Journal of Information Technology & Decision Making (IJITDM), 2004, vol. 03, issue 04, 633-650

Abstract: Behavior analysis of credit cardholders is one of the main research topics in credit card portfolio management. Usually, the cardholder's behavior, especially bankruptcy, is measured by a score of aggregate attributes that describe cardholder's spending history. In real-life practice, statistics and neural networks are the major players to calculate such a score system for prediction. Recently, various multiple linear programming-based classification methods have been promoted for analyzing credit cardholders' behaviors. As a continuation of this research direction, this paper proposes a heuristic classification method by using the fuzzy linear programming (FLP) to discover the bankruptcy patterns of credit cardholders. Instead of identifying a compromise solution for the separation of credit cardholder behaviors, this approach classifies the credit cardholder behaviors by seeking a fuzzy (satisfying) solution obtained from a fuzzy linear program. In this paper, a real-life credit database from a major US bank is used for empirical study which is compared with the results of known multiple linear programming approaches.

Keywords: Data mining; classification; fuzzy linear programming; satisfying solution; credit card bankruptcy (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (2)

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DOI: 10.1142/S021962200400129X

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