CRI听力: China's Credit Card Crunch Tightens for Would-be Users

Chinese bankers are getting more cautious about new credit card applicants. Unlike previous easy approvals, issuers now have tightened up the verification process on credit decisions to ensure applicants can pay off their balances. Our reporter Wang Ling has more.

Reporter: (www.hXen.com)

Many college students who apply for credit cards are feeling the pinch as banks become more careful about issuing credit.

The once sizzling market for credit card issuers no longer appeals to bankers.

Some commercial banks, including the leading credit issuer, China Merchants Bank, have stopped marketing credit cards to students altogether. Some of them have lowered the line of credit from about 3 thousand yuan to several hundred.

Zhong Xiangqun is director of personal finance department at the Bank of China.

"We have lowered the line of credit for students. It is a fairly low limit in the industry, so we can keep risks under control."

Chinese banks have begun to back off the credit card business largely because college students have been blacklisted as high-risk cardholders as more borrowers default on their payments in the wake of the financial crisis.

Accordingly, banks have begun to tighten the standards for applicants on a large scale.

Guo Tianyong is a banking expert at the Central University of Finance and Economics in Beijing.

"I think the credit card market in China has developed to a stage which demands that issuers pay more attention to the details of service. It's more important to maintain and cultivate customers with good credit than simply increasing the number of credit-card users."

Earlier this week, China's central bank, the People's Bank of China, also warned about the potential risks of an increase in overdue credit card debt. It reported that 3 percent of total credit card debt was overdue in the first quarter, a 0.6 percent increase from the same period last year.

Wang Ling, CRI news.