A blanket ban that the China Banking Regulatory Commission announced on issuing credit cards to students under the age of 18 does not mount to an adequate response to the rising default risks in the credit card market.
Improved regulation of the credit card market requires China's banking regulator to press commercial lenders to carefully assess creditworthiness before issuing cards while encouraging innovations to improve consumers' advantages.
The number of credit cards in China has almost tripled in the last three years to 150 million by the end of March this year because of both aggressive promotion and more adaptation to credit consumption.
As the credit card business becomes an increasingly important source of revenue, domestic banks vie with one another to issue as many cards as possible. Some even made the number of new cards a measure of performance.
It was under such circumstances that domestic banks began to offer credit cards to students though most of them do not have a steady income.
A recent report by the People's Bank of China found that credit card debt, which is at least six months overdue, surged 133.1 percent in the first quarter from a year early to 4.97 billion yuan.
