Caution: Traps behind credit card use

08:44, September 21, 2012

(International Financial News)

As a credit tool that allows people to buy first and pay later, the credit card has an undisputed function in stimulating the domestic demand and expanding consumption. However, the credit card "has a zero deposit rate but charges fees for withdrawing money" and various credit card promotion activities usually just "look beautiful."

Furthermore, credit also charges other fees of various kinds, such as the annual fee, service fee, punitive interest and late fee. Consumers usually know little about these items and often "fall into traps" once they are careless.

Credit card charging items have turned into a "mess." In addition, credit card owners may also suffer severe losses if their cards are stolen. Under this condition, how could the credit card play the role of stimulating consumption?

Why is credit card issuance "so prosperous" but credit card use "so troublesome?"

The extensive increase of credit cards is the main reason for credit card consumption traps. In recent years, various banks have been competing in issuing credit cards and the number of credit cards has sharply increased in China. However, common people's knowledge and sense of credit consumption are still at a low level of several years ago, and since detailed rules for using the credit card are complex and many, common consumers usually do not know much about them.

This abnormal increase of credit cards has led to such situations as one person holding many credit cards and an amazing number of credit cards staying idly. To make things worse, the supervision on the card issuance link is weak, and when workers of banks are promoting credit cards, they usually emphasize only advantages of credit cards and say little about their charging items and specific using rules. Therefore, it is not surprising that many consumers often fall into traps while using credit cards.

In order to make consumers trust and use credit cards at ease, the first thing to do is to strictly control the credit card issuance link. Banks should take credit card applicants' practical demands and rights to know as preconditions to strengthen the training and management on their workers in charge of issuing credit cards so that credit card consumers could know relevant charging items and rules for using credit cards.

On the other hands, in order to make consumers trust and use credit cards at ease, the service link must also be strictly controlled. Banks should based themselves on credit card holders' lawful rights and interests to adopt more reasonable and convenient measures in such aspects as the fee charging, loss register, interest accrual and payment notice and use high-quality services to eliminate credit card holders' worries.

However, "there is no free lunch in the world." Consumers, facing dazzling credit card promotions and advertisements of various kinds, should also open their eyes widely so that they will not fall into credit card traps.

Credit consumption is an important mode for activating the consumption market. With the "expanding the domestic demand and promoting consumption" policy, the credit card should play a more effective role. Only if banks stick to the idea that "honesty is the foundation and service is the top priority" can credit card holders "travel all over China with one card" (words of a credit card advertisement) and credit consumption take root, thrive and turn into a power practically promoting the domestic demand.

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