March 26, 2007

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  NEWS: Rise of Chinese ‘Credit Card Slaves'

  Credit cards are booming in China, but the country's residents are vocal about preferring to use them carefully. The term ‘credit card slave' has been coined in popular usage to describe someone who is only able (or not able) to pay the minimum monthly payment each billing cycle. On the other hand, one major card issuer is using the happy-go-lucky slogan, "enjoy today's happiness using tomorrow's money," and it is evident that some young Chinese are taking that advice to heart.
  
  Thanks to relentless urban marketing, credit cards have become more and more popular in large cities. The average city dweller has two credit cards, though 20% hold more. Unlike in the U.S, some 85% pay off their entire debt each month. But 20% of the remainder – who would be classified as "slaves" – only make the minimum payment each month.
  
  Young people have become the backbone of the industry in China. Surveys by card issuers show that the school-age generation is using their plastic to buy such luxuries as they could not afford with cash, like computers, iPods, cell phones, and clothing. It is this age group that is most likely to get into trouble with their cards and overspend. It seems that elder Chinese are very ingrained in their habits of thrift and financial prudence, and are much less likely to run into credit card slavery.
  
  
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