Bust-Out

A bust-out is a carefully hatched plan to defraud credit card companies out of a lot of money.

First a fraudster applies and receives a credit card. They act like a model consumer for a brief time period—not overspending and making all monthly payments on time. So the credit card company thinks, “What a great customer; let's increase his credit limit.”

Meanwhile, the fraudster is taking out many other credit cards and making payments on time. When he amasses enough available credit to buy a Lambo, the bust-out phase begins. He maxes out all the cards and quits making any payments, leaving the credit card companies holding the bag.

This could happen with any type of revolving credit, such as store credit cards or home equity lines of credit, but fraud detectors are always on the lookout for this type of behavior. And just like in old Western movies, you have to believe that the Sheriff always wins in the end.