What you should know about using credit cards

With the rapid development of credit card business in China’s banking financial institutions, more and more customers are using credit cards. In order to improve the quality and efficiency of financial services, strengthen prudent compliance, ensure the safety of customers’ credit card use and avoid the risk of theft or loss, the notice sets a regulatory credit card payments processing red line for the sleeping card rate. At the same time, due to the blind pursuit of scale effect and market share, some financial institutions in the banking industry issued too many duplicate cards, resulting in disorderly competition, waste of resources, excessive credit and other problems
“In the future, the CBRC will also dynamically adjust down the proportion of long-term sleep credit card limit Chinese standards, continuous development to urge the corporate industry to reduce the proportion of sleep cards to a lower level." The relevant management department of the CBRC work in charge said that the banking industry financial services floor washing machine commercial institutions shall not directly or indirectly to the number of cards issued, the number of customer information, market share or market economic ranking as a single or main goal assessment and evaluation indicators.
Under such circumstances, the issuance of a “notice" to strengthen the management of credit card business is not only necessary, but also urgent. The director of Shanghai Financial Development Laboratory just said that some commercial banks’ credit card business management indicators are too high. From a strategic point of view, in recent years, many banking financial institutions have actively transformed to retail business, and credit card as an asset business is widely used as an entry point and focus. However, in the process of business development, there are also some simple indicators, such as the number of cards issued, the number of customers, etc. as assessment standards, the lack of scientific assessment mechanisms and incentives, which will inevitably lead to the short-term credit card business. At present, the credit card business is often the “disaster area" of the bank complaints. On the one hand, the credit card business has a large customer base and a large transaction volume. But on the other hand, the key elements are not prominent, the cooperation behavior is not standardized, the control is not in place, the collection management is not standardized, etc. are also easy to cause customer complaints.
To regulate the banking industry financial service institutions can carry out credit card external economic cooperation learning behavior, “Notice" from a number of different aspects of the problem a clear, gradually clarify the boundary of authority and responsibility. The Notice requires that the banking industry financial regulators should assume the social responsibility of the main body of accounting for the operation risk management of the institution’s co-branded cards, to ensure that both sides of the co-branded card partnership present their respective brands equally in all credit card-related personnel business work sessions, and shall not directly influence or disguise the exercise of banking duties by the co-branded unit on behalf of the bank or replace the bank brand with the co-branded unit brand.
The relevant department head of the CBRC said that for the joint card business, the Notice prohibits banking financial institutions from exercising credit card business responsibilities directly or disguised by the joint units, and the business scope of joint card cooperation is limited to the promotion of joint units and the provision of their main business areas of interest services. The analysis and monitoring of the operational risk, reputation risk and other adverse effects of co-branded units should be continuously strengthened to strictly prevent the transmission of risks to the institution.

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