China's Commercial Bank Credit Card Business Risk Management

Since the credit card was first introduced in China in 2003,the credit card market has been experiencing rapid growth trend. Because the interest from credit card accounts the largest proportion of bank business income, so cards business becomes the central issue in the process of strategic transformation. The general rule of popularity of credit cards shows that, cards business will be experiencing extreme difficulty in obtaining sustainable development and encountering serious destructiveness in building financial operation system. Currently, the credit risk of domestic commercial banks is still within the controllable range. However, we cannot neglect the rising risk. In other countries, the development of credit card industry has experienced a long and painful process of exploration of risk control. The main issues are, as we all know, the risk characteristics of credit card itself and excessive marketing of commercial banks, These conspicuously became the focal point of credit card risk management in the whole banking industry. How to deal with credit card risk becomes important subjects after the period of financial crisis.In this paper, first of all, we analyze the characteristics and the types of credit risk and related theories. Secondly, it describes the theoretical basis and management elements of credit risk management. This management, however, must follow the life cycle of the credit card business. Then, introduces the advanced experience and painful lessons of developed countries and regions. Especially the background and reasons of credit crisis in South Korea and China Taiwan, and what inspired us during the process of economic development. Moreover, we make a detailed analyze of the status of credit card risk management in China. In this case, we will discuss two urgent issues which are lack of law system and inadequate personal credit information system, by analyzing both internal and external environment of risk control management of commercial banks in China. The last but not least, we summarize some suggestions which can improve risk management of commercial banks in China, through referencing advanced credit card risk management experiences.