The Financial Supervisory Commission (FSC) said it had reached an initial consensus with the nation’s major credit card issuers and consumer protection groups at a public hearing yesterday, which would allow card issuers to charge interest on unpaid revolving credit balances instead of requiring the full due balance.
“The new interest calculation will be reasonable and in line with international practice,” Lin Tung-liang (林棟樑), deputy director of the commission’s banking bureau, told a media briefing yesterday.
He said representatives from major issuers, such as Chinatrust Commercial Bank (中國信託商銀), Citibank Taiwan (花旗台灣) and Taipei Fubon Commercial Bank (台北富邦銀行), attended yesterday’s hearing and raised no opposition.
The new policy, along with its calculation details, still requires final approval from the commission and the Consumer Protection Commission before it goes into effect.
“The FSC is scheduled to complete its review before next week,” Lin said.
Once the new policy takes effect, cardholders will be charged daily interest on their unpaid revolving balance.
For example, if a cardholder only pays half of his or her NT$10,000 (US$312) credit card balance from the month before, they will be charged interest only on the NT$5,000 unpaid revolving balance instead of the full due balance of NT$10,000.
The time period over which interest charges are calculated will also be curtailed since part of the due balance has been paid.
The commission’s latest statistics showed that as of the end of December, the nation’s 1.3 million cardholders had a total of NT$208 billion in revolving credit, down from NT$210 billion in the previous month, Lin said.
The data also showed that the non-performing loan (NPL) ratio of credit card lending declined to 0.96 percent in December, down 0.11 percentage points month-on-month.
Credit card spending has also seen steady growth in the past two to three months, totaling NT$135 billion in December — a sign of improving domestic consumption, Lin said.
The NPL ratio of cash card lending also declined to 2.271 percent, down 0.134 percentage points from the previous month, the data found.
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