Mon, Feb 11, 2019 - Page 16 News List

Cash advance cards continue steady retreat

HIGH RISK:Few cards have been issued since the FSC marked the product ‘high-risk’ in 2005, with banks instead offering their cash-strapped clients revolving credit lines

By Kao Shih-ching  /  Staff reporter

Cash advance cards are losing importance in the local financial market, with outstanding debt dropping to a new low last year, Financial Supervisory Commission’s (FSC) data showed.

By the end of last year, 384,771 valid cash advance cards had been issued by 16 local banks, with combined outstanding loans falling 7.97 percent to NT$17.35 billion (US$564 million), from NT$18.85 billion at the end of 2017, the lowest level since the commission started collecting the data in 2004.

The non-performing loans (NPL) ratio for the cards and bad loans written off continued to decline last year to 0.885 percent and NT$403.76 million respectively, the data showed.

In comparison, 29.57 million valid credit cards had been issued by 34 banks and total card spending reached NT$242.18 billion by the end of last year, the data showed.

The number of valid credit cards is 76 times that of cash advance cards, so cash-advance cards have clearly lost importance, Banking Bureau Deputy Director Wang Li-chun (王立群) told the Taipei Times on Feb. 1.


The cash card business has seen a continued decline since the commission tightened regulations in 2005, identifying the cards as high-risk, Wang said, adding that no bank has actively offered new cash cards or promoted such services since then.

The cash card loan balance reached a peak of NT$298.4 billion by the end of 2005, but had fallen to less than one-17th of that peak by the end of last year, Wang said.

The number of cash card issuers also fell from 31 in 2005 to 16 last year, he added.

KGI Bank (凱基銀行), which introduced the nation’s first cash card, “George & Mary,” in 1999, holds 80 percent of the market, followed by Taishin International Bank (台新銀行) and CTBC Bank (中信銀行), the data showed.


KGI said it does not promote its cash cards anymore, unless clients ask about it.

“Clients still have the need for small loans and cash for emergencies, but we now provide revolving credit to replace cash cards,” the bank said, adding that the maximum credit amount is NT$1 million.

First Commercial Bank (第一銀行), Bank SinoPac (永豐銀行) and CTBC Bank offer similar revolving credit products.

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