Despite the recent decision by banking authorities to relax the regulations on applications for credit cards by foreigners living in Taiwan, local banks did not appear very interested in following suit and relaxing their criteria for the granting of new cards to expats.
"The main issue is that many foreigners have no long-term fixed abode or guarantor, which makes it difficult for card issuers to get hold of them when it comes to claiming the bills," Meiji Chen (陳明智), head of the card business division at Union Bank of Taiwan, said in a telephone interview yesterday.
Foreign cardholders are a tiny segment of credit card business for Taiwan's banks, with just over 300 customers. Most of them are expatriates working for global companies and have a solid financial status, Chen said.
Union Bank is the nation's fourth largest credit card issuer with 2.96 million cards in circulation as of October, according to Banking Bureau statistics.
Even though the central bank has eased its regulations, banks may not follow suit and loosen their policies for granting credit cards to non-natives, Chen said, adding that foreign professionals would remain their preferred customers.
The central bank announced on Wednesday that it would scrap restrictions on the applications of foreign nationals for credit cards and cards would no longer be subject to an expiration date matching that of their residence permit in Taiwan.
The bank's decision was made to further liberalize the nation's foreign exchange policy, the bank said in a statement. From now on, it will be the issuing bank's responsibility to evaluate any risks themselves and to decide who to issue credit cards to, the amount of the credit limit and when the cards expire, the statement read.
Under previous restrictions, only foreigners who were eligible to stay in Taiwan for over one year were allowed to apply for credit cards. The period of validity of foreign people's credit cards could not exceed the period of validity on their residence permit.
Echoing Chen, Michael Chang (張智詮), senior vice president of credit card business at Chinatrust Commercial Bank (中國信託商銀), said they are not considering issuing credit cards to non-natives with short-term residence.
Chinatrust Commercial is Taiwan's largest credit card issuer with 7.07 million cards in circulation. Less than 0.2 percent of their customers are foreign cardholders, according to the bank.
The risk of bad loans is another concern, as both Chen and Chang said they had seen cases of foreign cardholders leaving the nation without paying their bills.
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