Thu. Mar 4th, 2021

Regulation HK

Financial Regulator

PBOC Removes Limits on Credit Card Rates – Report

1 min read

The new policy is expected to benefit smaller card issuers and encourage competition from internet platforms and tech giants.

The PBOC (People’s Bank of China) has removed the upper and lower limits on credit card interest rates from 1 January as part of a move to allow the market to set rates, reports Caixin.

Under the new policy, credit card issuers can set their own interest rates for unpaid monthly balances.

Previously, the upper limit was a daily interest rate of 0.05%, equivalent to an annualised rate of 18.25%, and the lower limit was 0.7 times the upper limit, or an annualised 12.775%.

According to the PBOC, credit card operators must fully disclose annualised interest rates and ensure that card holders know and accept the rates.

The new policy is expected to benefit smaller card issuers and encourage competition from internet platforms and tech giants.

Currently, China’s 10 biggest banks command about 98 percent of the credit card market.

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