Credit card overdraft set to expand 50%
By Zhang Fengming |
July 22, 2011, Friday
|
Print Edition
Print Edition
THE value of credit card overdraft is set to rise by 50 percent in China this year as more consumers roll over their balances, China UnionPay Co President Xu Luode said yesterday.
The rollover balances may grow to 600 billion yuan (US$92.3 billion) this year from 400 billion yuan in 2010, Xu told a finance forum in Shanghai yesterday.
As more consumers use credit cards to boost domestic consumption it is expected that the rollover balances, or overdraft, will also increase, he said. "We will go out to make the financial industry play a bigger role in boosting consumption as China shifts its economic structure," Xu said.
Domestic consumption contributed to about 35 percent of China's economy while it is 70 percent in the United States.
Last year, the combined credit line of credit cards topped 2 trillion yuan, Xu added.
Credit cards are expected to be the second most lucrative retail credit business for lenders by 2013, after individual mortgages, said McKinsey & Co in an earlier report.
China has issued more than 242 million credit cards at the end of March, an annual rise of 25.7 percent. There were also 2.6 billion bank cards in circulation at the end of March, an annual growth of 18 percent.
China is encouraging the use of credit cards to power domestic consumption. Lenders are expanding their credit card business because they regard it as a new cash cow.
The rollover balances may grow to 600 billion yuan (US$92.3 billion) this year from 400 billion yuan in 2010, Xu told a finance forum in Shanghai yesterday.
As more consumers use credit cards to boost domestic consumption it is expected that the rollover balances, or overdraft, will also increase, he said. "We will go out to make the financial industry play a bigger role in boosting consumption as China shifts its economic structure," Xu said.
Domestic consumption contributed to about 35 percent of China's economy while it is 70 percent in the United States.
Last year, the combined credit line of credit cards topped 2 trillion yuan, Xu added.
Credit cards are expected to be the second most lucrative retail credit business for lenders by 2013, after individual mortgages, said McKinsey & Co in an earlier report.
China has issued more than 242 million credit cards at the end of March, an annual rise of 25.7 percent. There were also 2.6 billion bank cards in circulation at the end of March, an annual growth of 18 percent.
China is encouraging the use of credit cards to power domestic consumption. Lenders are expanding their credit card business because they regard it as a new cash cow.
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