Chinese state media reported on the 11th that as “gold investment” has recently gained sensational popularity in China, people who sell gold after attracting credit card cash services have appeared, putting the brakes on commercial banks.
China’s Economic Daily reported on the same day, “In the temptation of high profits, some investors are trading arbitrage by buying gold through credit card cash services or consumption loans, and numerous related strategies are shared on social media.”
In response to such reckless investment activities, several banks, including Heungup Bank, Transportation Bank, Jiangsu Bank, and Gwangpa Bank, recently issued notices to prevent credit card funds from entering investment areas such as gold and stocks, and violators will be subject to control measures, he said.
The bank warned that withdrawing cash from a credit card and trading gold would violate the card usage regulations and take a financial risk.
The bank added that if gold prices fall and there is a loss, it will have to pay a fee on the money borrowed from credit card companies, there is a risk of bad credit records, and banks can reduce credit limits or demand early repayment.
Recently, the Chinese financial authorities have started tightening credit card regulations.
According to the People’s Bank of China, as of the end of last year, the total number of bank cards in China was 9.91 billion, of which credit cards, debit cards, and credit cards were 727 million, down 5.14% from the same period last year.
However, the total amount of credit card arrears for six months increased by 26% to 123.964 billion yuan. The Economic Daily reported that banks are paying attention to managing the risk of “bad loans” because the amount of arrears increases even if the number of credit cards decreases.
EJ SONG
US ASIA JOURNAL
