| Summary: | 碩士 === 國立政治大學 === 經營管理碩士學程 === 94 === Credit card market, driven by foreign banks and local new banks, had been boosting from 1991 to 2005 derived from GDP growth, hike of foreign exchange reserves, laws ease up, and government policies creating friendlier environment to boost consumer spending. In the same time, banks’ credit policies were loosened due to fierce competition among credit card issuers, issuances of cash card and integrated unsecured loan led by sales and marketing. Given the situation of over-banking and competition in credit card market, consumers overspent under the consistent economy recession triggered credit crunch for credit card and cash card, so called “Credit card and cash card lending crash”. This research intends to search for the root of this credit crunch by investigating the history of the growth of credit card business and issuance of cash card of major players in the market. Furthermore, this research also evidences the concluded root reasons by analyzing the important information reported to FSC by all the banks.
The conclusions of the investigation are as follows:
1. Banking industry overemphasized on business growth so the related risks were not properly and timely controlled by simplifying application procedures and increasing credit lines hoping to enhance number of customers and strengthen customers’ loyalty.
2. Banking industry ignored the percentage of customers’ real income and liability while expanding their business rapidly. It further deepened the delinquency ratio and card issuers wrote off enormous amount of bad debts when credit crunch happened.
3. Debt Negotiation Plan (DNP) led by government enabled banks to set up “Standard Operation Procedures” (SOP) which helped banks to resume their card business back to normal. The success ratio of DNP is increasing gradually. The future of credit card market all depends on how banking industry, consumers, and government deal with the issues on consumer unsecured loans.
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