Study On Credit Card's Profitability Of Commercial Bank In China

From 2003 to 2006, credit card business of commercial bank in China has got excellent success, along with which the number of credit card has increased form 1,500,000 to 30,000,000. China has become the biggest market of credit card in Asia except Japan, South Korea and Taiwan. But income of these commercial banks is unsatisfactory. Nevertheless, only Guangdong Development Bank and China Merchants Bank gained profits, while the profit margin is lower than that any other business in corresponding time of commercial bank. According to this phenomenon, the article compares the main factors of credit card's profit between Chinese and American commercial bank, it shows that underutilized of credit circle and small scale of overdraft are the main factors of unsatisfactory profit of commercial bank's credit card business in China. Then, the article uses data of credit card in China to do a positive analysis which result confirms that overdraft balance is the key factor of credit card's profit of commercial bank in China. At last, the article gives some suggestions to develop the capacity of credit card profit of commercial bank in China.