A consumer advocacy group yesterday praised the government's plan to tighten regulations for issuing credit cards to young adults, saying the move can help keep young cardholders out of debt.
"Most young adults are unfamiliar with credit management, meaning we need the government as well as card issuers to have strict rules on giving out cards," said Jason Lee (李鳳翱), vice chairman of the Consumers' Foundation (消基會).
Lee made the remarks after the Bureau of Monetary Affairs on Tuesday tightened regulations on credit-card users who are students or are under 20 years of age.
According to the bureau, persons under 20 will not be allowed to hold a major credit card unless he or she can verify a stable income for at least 12 consecutive months, or has received parental approval for the card application.
As for students over the age of 20, card issuers will be required to investigate their financial status and send letters to their parents informing them that a card is being issued.
In addition, students are allowed no more than three credit cards, with a maximum credit limit of NT$20,000 for each card.
Parents will also have the authority to check the bills of young cardholders and to ask banks to terminate the cards, the bureau said.
Young adults not qualified to apply under the new criteria can only be issued cards that are add-ons to their parents' account.
According to Chen Shu (
The rule aims to curb unchecked student card usage and growing personal debt among the young.
"The issuing of cards to financially illiterate students has become a [major] social issue over the past three years" Lee said.
He added that severe competition has forced card issuers to lower the application criteria and to use giveaways to attract customers.
"Cards are readily available, with many schools and curb-side marketers promoting them," he said.
Credit-card companies also encourage card use by offering bonus money or gifts for multiple transactions.
These practices have resulted in some young people ringing up charges beyond what they can afford and becoming a burden to their parents.
"We get lots of complaints from parents seeking to limit student access to credit cards," Lee said.
He said that parents often end up footing the bill because they don't want their children to have a bad credit record.
According to the private Joint Credit Information Center, credit-card users under 20 account for 1.71 percent of the nation's cardholders. Nearly 1 percent of these young cardholders holds NT$30,000 in credit card debt.
According to the government, 30 million credit cards were in circulation in Taiwan as of November last year, a 37 percent increase from the 22 million cards a year before.