Cash-advance cards to be restricted

The nation's banks have reached a consensus on guidelines for cash-advance cards, the Bureau of Monetary Affairs, under the Ministry of Finance, said yesterday.

The rules, which will come into force by the end of June, will prohibit banks from issuing the cards to people under the age of 20. Students and people aged between 20 and 25 who have no regular income will not be able to obtain more than two cash cards, with a NT$20,000 limit on each card.

The cards allow users to withdraw money from their debit accounts via automated teller machines. They are usually charged each time they withdraw money.

The bureau opened discussions with banks because increasing numbers of young people were having trouble paying off the debts on the cards.

In recent years, financial institutions have shifted their focus from corporate banking to consumer banking. In addition to the credit card market, banks see the great potential of the cash-card market.

Twenty-six banks have issued a total of 2.4 million cash cards, with Cosmos Bank (萬泰銀行), Taishin International Bank (台新銀行), Union Bank of Taiwan (聯邦銀行), E. Sun Bank (玉山銀行) and Ta Chong Bank (大眾銀行) leading the market.

There are also around 30 million credit cards in circulation in the country, according to the Asian Banker Research, a number that is growing by around 30 percent a year.