This article explains how LoanPro categorizes balances and enforces credit ceilings using a two-layer bucket infrastructure. It also goes over the distinct roles of primary and secondary buckets, real-world configuration scenarios, and how transaction payload data routes spending to the correct category.

Bucket roles and structure

Primary and secondary buckets work together to give you complete control over line of credit (LOC) account management. You can configure unique settings for each bucket, including credit limit, computation method, interest rate, and interest charge method.

Primary bucket

The primary bucket determines the overall credit limit for a LOC account, and it acts as a catch-all for any purchases that are not routed to a secondary bucket.

Secondary buckets

Secondary buckets are used to categorize spending. They are fully customizable and can be used to group purchases based on any number of factors (e.g., merchant, transaction amount, date, or ZIP code). Common uses for a secondary bucket include:

• Cash advances.
• Introductory periods with lower interest rates.
• Preferred spending categories.

Credit limit enforcement

An account’s primary bucket always enforces its overall credit ceiling. While secondary buckets configured at the account level with no program configuration in place can have higher credit limits, they will never override the primary bucket’s limit. If a purchase belonging to a primary or secondary bucket would exceed an account’s overall credit ceiling, LoanPro will automatically decline it.

Configuration scenarios

Limited-use secondary buckets

If you want to limit transactions within a specified secondary bucket, you can set the bucket’s credit limit at an amount lower than the primary bucket’s.

For example, your program might include the following bucket configurations:

Account ceiling enforcement

If a cardholder has a $400 balance in the Cash Advance bucket and then tries to make a $700 purchase that falls within the Promotional bucket, LoanPro will decline the transaction. While the Promotional bucket has an $800 credit limit, the resulting balance of $1,100 would cause the overall balance of the secondary buckets to exceed the credit ceiling set by the Primary bucket.

Secondary bucket enforcement

LoanPro does not decline or reroute transactions based on secondary bucket availability. Enforcement of secondary bucket limits must be explicitly handled through transaction routing logic.

If a program requires secondary bucket enforcement, you have two configuration options:

1. Add routing logic within LoanPro to check the available credit in a secondary bucket and reroute the transaction to another bucket when the requested amount exceeds the available credit.

• You can add routing logic at the Program level by accessing Finance Charge & Transactions > Transaction Rules.

2. Manage routing logic externally by sending transactions (via API) directly to the LMS when LoanPro is used in a log-only capacity. In this case, the Program Manager can evaluate the transaction before sending it to LoanPro—either rerouting the transaction to the Primary bucket or declining it entirely if it exceeds the credit limit for the intended secondary bucket.

Secondary buckets with higher limits

If you are only concerned with an account’s overall credit ceiling, you can set a secondary bucket’s limit at or above the primary bucket’s limit. This can only be done at the Account level if Program configurations are not in place.

For example, your program might include the following bucket configurations:

If a cardholder has a balance of $2,900 in the Primary bucket and then attempted a $150 purchase in either secondary bucket, LoanPro would automatically decline it. Even though the secondary buckets have higher ceilings, the account’s total balance cannot exceed the overall limit, which is still defined by the Primary bucket.

Purpose of secondary buckets with higher limits

If credit limit differences are functionally non-existent when a secondary bucket’s ceiling exceeds the primary bucket’s, then what is the purpose of configuring a secondary bucket with a higher limit? It is a great approach when you expect a cardholder to qualify for future credit limit increases.

In the above bucket configuration, if the cardholder qualifies for a credit limit increase to $5,000, you would only need to edit the primary bucket. You would not need to edit the secondary buckets. However, if the credit ceilings on the secondary buckets were initially at or below the Primary bucket, you would need to edit each bucket whenever a cardholder qualifies for a credit limit increase.

If you use or plan to use secondary buckets like this, we recommend setting their limit at the maximum amount you would ever allow for the overall limit on the account.

Decreasing credit limits

If you lower an account’s credit ceiling manually or via automation, the limits on the secondary buckets remain unchanged. The primary bucket still controls all negative balance logic.

For example, your program might include the following bucket configurations and balances before a primary bucket’s credit limit is decreased:

In this situation, the cardholder has $100 in available credit. However, if the Primary bucket’s credit limit is decreased to $800, the total balance of $900 would be over the limit. Further spending would automatically be blocked until the cardholder pays down their debt and restores an available balance.

Added secondary buckets

If you add a new secondary bucket to an account, the overall credit ceiling will not change. The only difference will be the cumulative value of the secondary buckets.

Cash advance identification

Cash advance transactions (e.g., ATM withdrawals) are identified upstream and passed to LoanPro as part of the transaction payload. Once identified, LoanPro routes the transaction to the configured Cash Advance bucket on the account.

The designation of a transaction as a cash advance depends on the issuing processor and how the cash advance flag is set or derived.

Important considerations:

• Cash advance limits are category-specific controls—not replacements for the overall credit limit.
• Category-specific enforcement depends on whether logic is configured via processor controls, middleware decisioning, and/or LoanPro routing rules.

You can learn more about cash advances in the Knowledge Base.