Taiwanese now hold almost 25 million active credit cards out of the 38.32 million cards issued by 36 institutions, and the balance of revolving credit stood at NT$107.6 billion (US$3.29 billion) as of the end of September, statistics from the Financial Supervisory Commission (FSC) showed.
Credit cards were introduced to the nation in 1974, and when the government allowed the formation of new banks in 1990, the credit-card and cash-card business became a cash cow for these banks.
The number of active credit cards exceeded 30 million in the early 1990s as banks simplified the application process and lowered the requirements for approval.
Some banks allowed young people, particularly university students, to apply for cards, and many young cardholders became so-called “credit card slaves” — a term referring to those who can only pay the minimum balance on their card bills every month.
Debts from credit cards and cash cards became a serious problem in the early 2000s, reaching NT$70 billion, with more than 400,000 people unable to pay their card debts.
The commission ordered banks to modify their card requirements. However, with revolving interest rates reaching up to 20 percent, the number of indebted cardholders remained high.
Domestic card issuers early last year agreed to lower revolving interest rates for some card holders and offer debt repayment solutions to indebted cardholders.
The revolving interest rates for cardholders who have been paying interest regularly since 2013 was lowered to 16 percent, the commission said on April 28 last year.
As credit cards have become an important form of payment for local consumers, some local banks since 2011 have joined with supermarket chains, department stores, hotels and theme parks to issue cobranded cards.
The electronic stored-value card business has continued to grow in recent years, with four specialized electronic stored-value card institutions and three commercial banks issuing cards.
EasyCard, used to pay for transportation fares as well as small transactions in authorized stores, remains the most commonly used stored-value card.
Commission statistics show that as of September, the number of effective credit cards totaled 38.32 million, effective cash cards 470,000 and effective specialized electronic stored-value cards 65.51 million, while the monthly retail sales of credit cards amounted to about NT$181.3 billion.
The balance of revolving credit was NT$107.6 billion and the amount of undue balance of installment was NT$82.07 billion.
The average ratio of delinquency credit against account receivables was 0.26 percent, while the total balance of cash-card loans was NT$23.3 billion, with an overall delinquency ratio of 1.188 percent.
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