Guess how much interest 69.34 RMB debt can generate after 10 days? The answer is 317.43 RMB! Usury? No! This is a real thing heppened in Mr. Li, due to a inequitable rule of credit card!
You need to apply for a credit card in China sooner or later if you study or work in this country, but this inequitable rule will charge your money much more when using installment repayment.
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What is the inequtable rules? A lot of banks in China charge interest on the total overdraft even after the cardholder has provided the minimum payment.
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It's really unreasonable, right? However, it has lasted for many years!
To deal with this unreasonable rule, China's Supreme Court released a draft statute that seeks to overhaul various aspects of the country's regulations for the credit card in Wednesday.
In the draft, the Supreme People's Court of China (SPCC) proposed unifying rules for banks charging interest on credit card overdrafts.
The court said it supports the idea of cardholders paying interest only on what they owe to the banks after they have paid a minimum payment, rather than on the full overdraft amount.
The draft also sought to set a maximum interest rate and penalties for overdrafts, saying that the court does not support penalties that exceed 36 percent of the annual interest rate.
The key issues that the SPCC aims to address are the normalization of rules for interest charges, penalties for credit card overdrafts and improving transparency.
In order to promote their credit cards, some banks do not properly disclose potential fees and penalties for overdrafts.
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"At the moment, banks' issuance of credit cards is a mess. Because of vicious competition, some banks, in order to boost credit card usage, ignore problems in their system," said Dong Dengxin, director of the Financial Securities Institute at the Wuhan University of Science and Technology, adding that the "the key is to improve bank transparency, especially on their charges."
After this new rules operating, you don't need to worry about the unreasonable high interest of credit card anymore!
© Image | xawd
The use of credit cards in China has seen steady growth in recent years. At the end of 2017, there were 588 million credit cards and debit-credit duo cards in use in China, up 26.35 percent year-on-year, according to a report released by the People's Bank of China, the country's central bank, on March 5.
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Source | ecns
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