Friday, April 15, 2016

New credit card regulations may give Alipay lowest overdraft interest can hit

On April 15, the people's Bank of China official website published the notice on matters related to the credit card business since January 1, 2017. New regulations on credit card interest rates, minimum payments, interest-free repayment period of overall has made new demands. So, for credit card users, which is a matter of concern.

For example, credit cards may give Alipay, but if it is to do business cash advance, most banks charge fees, there will probably be some institutions in order to promote the free of charge. For example, overdraft amount can be played a minimum of 70 percent.

We draw the focus and understanding of the following:

Notice of matters related to the people's Bank of China on the credit card business

PBoC's Shanghai headquarters, branches, business management Department, the capital (capital) City Centre branch, Shenzhen Central subbranch; the State-owned commercial banks, joint-stock commercial banks and postal savings bank of China China UnionPay company limited China Association of payment and clearing:

Market mechanisms for the credit card business, and improve the level of credit card services, protect the card holders ' legitimate rights and interests, promote the healthy development of the credit card market and related matters are hereby notified as follows:

First, interest rates

Upper and lower limits of management of credit card interest rate, overdraft interest rate ceiling for daily interest rate of five out of 10,000 overdraft interest rate lower limit of 0.7 times times the daily interest rate of five out of 10,000. Credit card debt settlement account, as well as the standard credit card relief contributions total interest paid and interest rate, determined by the card issuers independent.

Interpretation: the overdraft interest rate at present is five out of 10,000, meaning that as long as prior to the payment due date no money, then at five out of 10,000 to pay interest. New is available at a discount for new rules, different banks in the future, see lower interest rates.

Second, interest-free repayment period and minimum payments

Cardholders consumption enjoy interest-free overdraft repayment periods and minimum payment of treatment conditions and standards, determined by the card issuers independent.

Translation: at present, the Bank unified under a maximum 60 days, specific applications, unlike credit cards of different banks, but most will have 50 days. Now by the issuers themselves, will be interest-free repayment period greatly shortened? Worth paying attention to.

Third, breach of contract and service costs

Cancel credit card late fees, default overdue payments by cardholders, card-issuing institutions should work with cardholders through the agreement whether to collect liquidated damages, as well as the related means and standard. Card issuers from charging card holders more than credit card service, shall not be charged overlimit fee. Penalty charged by the card issuer to the cardholder and annual fees, cash handling fee, fee for services such as currency exchange fees shall not be charged interest.

Translation: first of all understand what is the late fee, and after the Central Bank set a minimum payment, before, it is the lowest or 10%. In other words, if you brush the 15000, minimum 1500, if you had only 500 Yuan, in accordance with the regulations to pay (1000 *5%) late fee of 50 Yuan. What now? Was replaced late fees with penalty, and how payments, credit card charge, will really have to shop around.

Four, a credit card cash advance business

Credit card cash advance businesses include cash withdrawals, money transfers and cash it. Which, cash extraction, is refers to holding card people through Cabinet surface and automatically Cabinet Member machine (ATM), self machines, to cash form get credit card pre take cash lines within funds; cash transfers, is refers to holding card people will credit card pre take cash lines within funds designated turned to I Bank settlement account; cash recharge, is refers to holding card people will credit card pre take cash lines within funds designated turned to I in non-bank paid institutions open state of paid account.

Holding card people through ATM, self machines handle cash extraction business, each card daily cumulative shall not over Yuan 10,000 yuan; holding card people through Cabinet surface handle cash extraction business, and through various channel handle cash transfers business of each card daily limit, by issuing institutions and holding card people through agreement agreed; issuing institutions can independent determine whether provides cash recharge service, and and holding card people Agreement agreed each card daily limit. Card issuers may not be the cardholder credit card cash advance within the limits of funds transferred to other credit card and non-card holders ' bank accounts or payment account.

Interpretation: the focus is on credit card ATM cash withdrawal limit from 2000 up to 10,000 yuan, but no use. To transfer money to their debit card, then get on the line, lines can decide for themselves. There is that credit cards may give Alipay. By 2012, credit cards, later called off. However, it must be recalled that, cash advance, and generally free of charge.

Five, trading information

Bank clearing houses should be in conjunction with the card issuers and acquirers, in strict accordance with banking card business regulations, further improving credit card transaction business rules and technical standards. Among issuers, acquirers should reflect and accurately identify recharge cash withdrawals, money transfers and cash and other business types, complete transmission of transaction information, ensure information authenticity, integrity, traceability and consistency in the payment process, facilitate the issuing institutions identify and assess risk, protecting credit card transactions safer.

Six, the disclosure obligation

(A) the card issuer through the Agency's Web site and other channels, full disclosure of terms of credit card applications, product features, fees and standards, safety knowledge and credit cards with standard protocol and articles and other content, and updated in a timely manner.

(B) the card issuers should be in significant ways in the credit card agreements prompted credit card interest rates and account settlement methods, interest-free repayment period and minimum payment conditions and criteria for the treatment of, and the penalty charged to the cardholder's details and charge a standard with the cardholder have major stakes to ensure that cardholders are fully aware of and accepted. Among them, for a standard credit card interest rates, indicate the daily rate and the interest rate.

(C) the card issuers to adjust standard credit card interest rates, should be at least 45 calendar days inform cardholders in accordance with the contract. Cardholders are entitled to select the account before the date of the new interest rates and in accordance with the signed agreement of reimbursement payments.

Seven, non-I authorize the processing of transactions

The cardholder made counterfeit card transactions and I authorize transactions such as account theft, card-issuing institutions should promptly guided the cardholder to retain evidence, error disputes in accordance with the relevant rules, and regular feedback to cardholder status. Encourages the card issuers through commercial insurance and provision for risk compensation fund or any other means, be reasonable compensation for loss of cardholders in accordance with law, protect card holders ' legitimate rights and interests.

Translation: this principle, nothing in particular. For the individual, at least regulated.

BA, interest rate information report

Card issuers to adjust credit card interest rates, grace periods, minimum payments and other related standards, shall be given 60 days to report to the people's Bank. Credit card interest rate interest rates into people's Bank monitoring and reporting system on a monthly basis to fill (see annex), should be completed before the 9th month on data submitted last month, initial time of submission before February 9, 2017, reporting January 2017 information related to credit card rates. Among them, the National Bank submitted to the Head Office of the people's Bank of other banking institutions according to the principle of territorial management, submitted to the legal seat of the people's bank branches.

Nine, the credit card business self-regulation

Give full play to the market interest rate pricing discipline mechanisms, imposed on credit card interest rates and interest rules set, self management, maintaining the order of market competition.

China Association of payment and clearing in accordance with the credit card business related regulatory requirements and notification requirements, establishing and perfecting the credit card fulfillment process, the use of self-regulatory mechanisms such as management and customer service, developing model credit card agreement and articles featured, protect the card holders ' legitimate rights and interests, promote the orderly development of credit cards market.

This notification shall come into effect on January 1, 2017. Bank card business of people's Bank provisions inconsistent with this circular, this circular shall prevail.

Branch of people's Bank, please forward this notice to area city commercial banks, rural commercial banks and rural cooperative banks, rural credit cooperatives, rural banks, foreign banks and non-bank institutions.

Annex: rules of the relevant head of the notice on credit-related issues and answered questions

Recently, the people's Bank of China issued the notice of matters related to the people's Bank of China on the credit card business (hereinafter referred to as the notice), since January 1, 2017. PBC official answered reporters ' questions on relevant problem of the notification.

Excuse me, what is the background of the notification?

Since 1985 since the birth of China's first credit card, the credit card industry in the "Golden card project", under the national policy to promote and have enjoyed great development. By the end of 2015, national credit card card number amounted to 390 million, credit cards credit balance to be repaid at the end of 3.1 trillion yuan, covering domestic short-term consumer loans or about 75%, to expand consumption and facilitate daily life and played an important role in supporting socio-economic development.

In recent years, with rapid economic development, some new situations and problems in the credit markets, has the necessary institutional reforms, to guide and regulate. A is existing regulatory system on credit card interest rate, and from card repayment period most long term, and minimum repayment amount and late fees, credit card products of core content provides too detailed and curing, not conducive to credit card products and service of diversified development, not conducive to inspired credit card market vitality; II is with consumption financial innovation upgrade and personal economic activities of increasingly rich, holding card people on credit card overdraft consumption, and pre take cash, service proposed has more personalized and diversification needs; three is in recent years, Cardholder disputes and credit-card charge disputes occur, card holders ' rights protection system needed improvement.

People's Bank attaches great importance to development of the credit card industry, combined with the current situation of the credit card market to improve credit card services, and protect the legitimate rights and interests of consumers at the core, grasping and balanced business innovation needs and preventing market risks, in full on the basis of the views of various parties and to develop the circular, to guide the card issuer establishing differentiated business strategies, promote transformation and upgrading of the credit card industry.

Second, reasons for credit card interest rate market and what are the specific measures?

In the early development of the credit card industry, the Government set a uniform fixed interest rate, help to form the standardization and normalization of credit card products and services, to promote the rapid development of the credit card industry has played a positive role. With credit card market within, and external environment changes, existing credit card interest rate policy has cannot adapted social economic development of need, main performance in: a is currently credit card interest rate pricing lack flexibility and differences sex, to meet holding card people on cycle credit service of personalized and diversification needs; II is fixed single interest rate bound has issuing institutions credit card assets business of fine of development, not conducive to effective play market on resources configuration of decisive role, not conducive to credit card industry from "Happy Valley enclosure" to "intensive" The transformation and upgrading of three credit card and deposit and loan interest rates has not established a correlation between credit card to encourage consumption, expanding domestic demand and failure to give full play to the role.

In this regard, people active in credit card interest rate policy, development of prudent and steadily push forward the marketization of interest rates on credit cards. Taking into account the credit card market matured in recent years, risk management systems are maturing, credit card installment pricing for market-oriented interest rate to make the attempt and the accumulated experience, promoting the credit card interest rate marketization conditions mature, people's Bank fully heed the views of the parties concerned, established the general idea of step by step promote the marketization of interest rates on credit cards. Maturity in foreign credit market interest rates, research based on the domestic market, determines overdraft current overdraft interest rates interest rate five out of 10,000 is the maximum interest rate, overdraft interest rate limit based on the daily interest rate of five out of 10,000 to fall 30%. Meanwhile, supporting open credit account settlement, contributions to the relief if interest and their interest rates and other related policies, to further improve the interest rate mechanism.

Third, why to set the upper and lower limits on credit card interest rates?

On credit card interest rate set ceiling and lower, stay timing mature again full implementation market pricing, main based on following consider: a is implementation points step go, and progressive type reform, conducive to issuing institutions in transition period within further accumulated pricing data and experience, guide its perfect credit card interest rate pricing mechanism; II is currently the issuing institutions credit card wind control capacity and pricing capacity uneven, for interest rate ceiling and lower guide, conducive to avoid individual issuing institutions blind price playing price war, Lead to unfair competition and higher-risk customers borrow heavily to increase credit risks, spark local chaos; the third is in the present context of disclosure mechanisms need to be strengthened, setting overdraft interest rate caps to prevent unreasonable individual card issuers charge excessive interest rates, protect the card holders ' legitimate rights and interests.

Next, people's bank credit card issuers will actively promote the establishing and perfecting the credit card interest rate pricing and management mechanisms, combined with developments in the credit card market and socio-economic development and steadily carry out the marketization process of interest rates on credit cards.

Four, why do you want to cancel the interest-free repayment period and the minimum payment limit?

Interest-free repayment period and the treatment is an important feature of credit card minimum payments and core services. Existing bank card business management approach provides credit card from card repayment period most long for 60 days, and first months minimum also amount shall not below month overdraft balance of 10%, and unified provides holding card people enjoy from card repayment period and minimum also amount treatment of conditions, makes issuing institutions on different level of customer lack differences service of elastic and space, not conducive to issuing institutions independent innovation and improved service. Of the notification of the withdrawal of the restrictions is intended to give card issuers more autonomous decision-making space, by card-issuing institutions based on their own business strategy and cardholder risk level a flexible combination of interest-free repayment period and the treatment of minimum payments, for the cardholder to provide diverse selection, forming the dislocation competition and complement each other's market.

Five, the introduction of the notification of the "liquidated damages" instead of "late fee", and prohibits charging over-limit fee, what to consider?

"Late fees" concept with strong administrative enforcement color, not suitable economic activity for equality between the market players. Based on the principle of equity and contractual relationships, for default overdue payments by cardholders, card-issuing institutions should work with cardholders through the agreement whether to collect liquidated damages, as well as the related means and standard.

Also, given the current credit card issuers have been able to achieve more than technology automation of credit transactions, and through the overrun part of the overdraft interest charges can reach cover cost and risk purposes, and banned the issuing bank overlimit fee charged to the cardholder, to regulate the card issuing institution service charges.

Six, the circular on credit card cash advance business and what to improve?

Credit card cash advance services with no transaction context marked, credit card issuers are to facilitate cardholders daily use of funds and the introduction of special services. Credit card issuers given the master cardholder credit and repayment capability of information such as risk control relies on the business card issuers. The notifications both to improve services and prevent risks, cash advance business to develop a basic requirement.

A credit card cash advance is clearly defined service types. According to the business development practice, cash advance business is divided into cash, cash transfers and cash charge three types, and clearly defined for each type of business.

II is the perfect cash advance business quota system. Balance card holders ' cash requirements and risk prevention needs, cardholders by ATM card cash withdrawal limits business from the existing cumulative per card per day increased from RMB 10,000 Yuan RMB 2000. For other cash advance business limits by card issuer in accordance with business strategy, cardholders risk level and the setting of limits needs Convention by protocol independent and the cardholder.

Third, proposed risk management requirements. Provides cash transfers, cash prepaid bank account respectively for my bank account, my account, prohibiting transfers between different credit cards, and emphasized the authenticity, integrity and traceability of transaction information, meet the reasonable cardholder needs, innovative space reserved for card issuers, based on maximum to plug the loopholes, reducing risk of loss. Require the card issuers in cooperation agencies reflect, accurate identity-related transactions on the basis of information, based on risk control, commercial sustainable principles to determine whether cash prepaid service, and give full play to role of the price lever to pursue such as interest rate risk and return the optimal balance in order to achieve the objective of encouraging innovation and development. Deficit rate is 3 in Lou Jiwei guarantee key expenditures

Seven, the circular on the impact of credit card holders?

In General, the notice to provide cardholders with personalized, customized service, rich cardholder choice, improved credit card functionality, greatly enhance the experience. Promote the marketization of interest rates on credit cards, open interest-free repayment period and the treatment of minimum payment limit, standard cash advance business and other related policies, will further promote the establishment of diversity, difference between credit card issuers and individual credit card products and services system, as to give cardholders more choice. For example, cardholders can be based on personal preference, credit standing and repayment habits, select their own interest rates, interest-free repayment period and the treatment of minimum payments credit cards and other related products; cardholders by ATM card cash withdrawal limits were raised, can adapt to their provisional or emergency needs. Meanwhile, the notice to cancel the overlimit fee, and provides penalty charged by the card issuer to the cardholder and fees, access fees, currency exchange fees, service fees shall not be charged interest and reduce cardholder interest payments.

Eight, how the notification reflected the cardholder's interests?

One is to protect the cardholder's right. Requires card issuers to make full disclosure of a credit card eligibility criteria, fees and standard and standard credit card agreement with articles and other content, prompts the cardholder notice in a significant way in the credit card agreements with them matters of significant interest to ensure that cardholders are fully aware of and accepted.

Second, respect the cardholder option. Require the card issuers to fully respect the cardholder wishes, adjust the standard credit card interest rates should be at least 45 calendar days in advance in accordance with the agreement to notify the cardholder and cardholder have the right to select the account before the date of the new interest rates.

Third, protect card holders ' funds safe. Require the card issuers should be properly handled counterfeit card transactions and I authorize transactions such as account theft, guided the cardholder to retain evidence in a timely manner, error disputes in accordance with the relevant rules, and regular feedback to cardholder status. Encourages the card issuers through commercial insurance and provision for risk compensation fund or any other means, be reasonable compensation for loss of cardholders in accordance with law.

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