An ICBC credit card. Most Chinese banks have been unable to turn a profit on credit cards. Photo: CFP
Eight months after Industrial and Commercial Bank of China (ICBC) changed interest rules to benefit its credit card holders, no other bank has followed suit because of fears of declining income.
In February, ICBC, the world’s largest bank by market capitalization, allowed its credit card holders to pay interest only on money they had not yet repaid, rather than exacting it based on the total amount borrowed.
The China Merchants Bank (CMB), China Construction Bank (CCB), and Agricultural Bank of China Thursday confirmed to the Global Times that credit cards owners still need to pay back the interest of all the money they have borrowed, even if they have already repaid part of the balances.
An anonymous official from the China Banking Association Thursday also told the Global Times that no bank has adopted policies similar to ICBC’s so far.
According to ICBC’s new rule, if the credit card owner overdraws 10,000 yuan ($1,464.72), he only needs to pay 0.0005 yuan per day when one yuan ($0.15) is not repaid beyond the grace period, compared with 5 yuan ($0.73) per day in the past which is calculated on the 10,000 yuan base.
A report from Diagaid Marketing Research said that other banks are not willing to change their rules because it will reduce the profits the credit card business generates.
Although only 11.8 percent of card owners have the overdue accounts, they make up 40 to 50 percent of all credit card income for banks, said the report.
Currently, only CMB, China CITIC Bank and Guangdong Development Bank have made profits from credit cards, according to the report.
Li Weiping, president of the peony card center with ICBC, said in an earlier interview that the income from credit cards depends more on commission and annual fees, rather than fines on late payments, according to mainland-based Digitimes magazine.
Although an official from ICBC said the bank enjoys providing more people-oriented services to card holders, an insider said the move helps ICBC expand its business in other sectors.
As a increasing number of people sign up for credit cards with ICBC, they will also be tempted to open a savings account that can be used for automatic payments. This could increase the amount of money people put into ICBC accounts, Deng Jing, an employee in the loan department of a Beijing branch of Shenzhen Development Bank, told the Global Times Thursday.
Figures from the ICBC website show the number of issued credit cards reached 48.86 million by September 23, up from 30.95 million since the end of 2008.
责任编辑：sealion1986
