According to a report on the US website on September 13, China's rapid shift to mobile payments has led some to believe that China will eventually bypass the credit card phase on its way to becoming a cashless society. However, the latest data means that this is not the case: China's central bank data show that in the second quarter of this year, China's credit card loans rose by 31% year-on-year to nearly 4.69 trillion yuan.
For the development of China's credit card industry, this is the best time and place for people: when the bank hopes to increase the amount of credit card issuance, the confidence of Chinese consumers has already exploded. At the same time, Beijing is eager to shift more of China's huge debt to households and stay away from heavily indebted businesses.
Investors predict that this trend will continue to accelerate, as there is still huge room for growth in the use of credit cards in China. Although the debt of Chinese households is gradually increasing, so far most of its debt is still mortgage: Deutsche Bank estimates that credit card loans only account for 13% of China's debt. In the second quarter of this year, Chinese banks issued 29 million new credit cards, bringing their total circulation to over 500 million. Even so, the per-capita penetration rate of about 0.3 per capita in China is still much lower than the 3.1 per capita in the United States.
The scale of transactions for credit card payments is also rising rapidly. But like other phenomena in China, what is worrying is that this new type of debt is quickly becoming addictive and consumers will be unable to extricate themselves.
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