Earn a dollar and spend two. That appears to be the financial strategy of Taiwan's debt-carrying credit-card users, ACNielsen reported yesterday.
"About 97 percent of people carrying a credit-card debt are not familiar with financial management ... thus their personal balance sheets are always in the red" said Desmond Wang (
And the problem gets worse: deep in debt, plastic-empowered consumers are the No.1 users of their card's cash-advance services, he said.
Cash advances allow credit-card holders to withdraw cash from ATMs for an average commission of about 3.5 percent and annual interest rates of 19 percent.
On average, banks charge 20 percent interest on all cards where only the minimum is paid each month. Taiwanese are swiping their plastic for ever larger amounts as credit-card debt grows in popularity.
According to ACNielsen's latest Life Index Report, in the second half of last year 27.7 percent of credit-card holders carried a balance, up 3 percent from the previous half.
The popularity of cash advances was also up slightly from 14.5 percent in the first half of last year to 15.2 percent in the second half.
Men between the ages of 25 and 34 are the most likely to pay the minimum on cards, with 57 percent in that category carrying a balance.
This group readily uses cash-advance services to shop for cars, consumer electronics and even swipe cash to make property downpayments, Wang said.
ACNielsen made the conclusion after conducting a survey of 7,500 Taiwanese between the ages of 20 and 60 in 2001.
Visa International reported similar results in February that showed men are more likely to quickly balance their debt than women.
The Visa report said 30 percent of Taiwanese card holders maintain a balance. Most of these debtors are between the ages of 20 and 35, with an annual income of between NT$300,000 and NT$1 million.
According to the Bureau of Monetary Affairs under the Ministry of Finance, last year cash advances in Taiwan incresased by 27.6 percent to NT$132.5 billion year-on-year over NT$103.8 billion in 2001.
The nation's unpaid credit-card debt last year was NT$316.3 billion, a 21.7 percent increase from previous year's NT$259.9 billion.
The popularity of plastic money is on the rise, with 39.7 percent of Taiwanese using cards. Of that group 18 .8 percent have at least four cards. In 1996, the penetration rate was 16.2 percent, the ACNielsen report said.
As of February, Taiwan issued 56.88 million credit cards.
WASHINGTON’S INCENTIVES: The CHIPS Act set aside US$39 billion in direct grants to persuade the world’s top semiconductor companies to make chips on US soil The US plans to award more than US$6 billion to Samsung Electronics Co, helping the chipmaker expand beyond a project in Texas it has already announced, people familiar with the matter said. The money from the 2022 CHIPS and Science Act would be one of several major awards that the US Department of Commerce is expected to announce in the coming weeks, including a grant of more than US$5 billion to Samsung’s rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), people familiar with the plans said. The people spoke on condition of anonymity in advance of the official announcements. The federal funding for
HIGH DEMAND: The firm has strong capabilities of providing key components including liquid cooling technology needed for AI servers, chairman Young Liu said Hon Hai Precision Industry Co (鴻海精密) yesterday revised its revenue outlook for this year to “significant” growth from a “neutral” view forecast five months ago, due to strong demand for artificial intelligence (AI) servers from cloud service providers. Hon Hai, a major assembler of iPhones that is also known as Foxconn, expects AI server revenues to soar more than 40 percent annually this year, chairman Young Liu (劉揚偉) told investors. The robust growth would uplift revenue contribution from AI servers to 40 percent of the company’s overall server revenue this year, from 30 percent last year, Liu said. In the three-year period
LONG HAUL: Largan Energy Materials’ TNO-based lithium-ion batteries are expected to charge in five minutes and last about 20 years, far surpassing conventional technology Largan Precision Co (大立光) has formed a joint venture with the Industrial Technology Research Institute (ITRI, 工研院) to produce fast-charging, long-life lithium-ion batteries for electric vehicles, mobile electronics and electric storage units, the camera lens supplier for Apple Inc’s iPhones said yesterday. Largan Energy Materials Co (萬溢能源材料), established in January, is developing high-energy, fast-charging, long-life lithium-ion batteries using titanium niobium oxide (TNO) anodes, it said. TNO-based batteries can be fully charged in five minutes and have a lifespan of 20 years, a major advantage over the two to four hours of charging time needed for conventional graphite-anode-based batteries, Largan said in a
Taiwan is one of the first countries to benefit from the artificial intelligence (AI) boom, but because that is largely down to a single company it also represents a risk, former Google Taiwan managing director Chien Lee-feng (簡立峰) said at an AI forum in Taipei yesterday. Speaking at the forum on how generative AI can generate possibilities for all walks of life, Chien said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) — currently among the world’s 10 most-valuable companies due to continued optimism about AI — ensures Taiwan is one of the economies to benefit most from AI. “This is because AI is