Profitability Of Commercial Bank Credit Card Business Strategy Analysis

Until the end of2012, China’s cumulative credit card volume reached331million ICBC credit card volume exceeded60million, investment, GF, livelihood and other joint-stock banks issuing amount of over10million and the first to achieve profitability. However, the corresponding yes, most of the other issuers of credit card business is still at a loss situation.Hundreds of commercial banks issued their own credit card, credit cards also boost the development spurt, starting in2003, China’s credit card volume every year to sixty percent rate of increase, but in recent years showing a slow development trend.Foreign credit card issuers to traditional overdraft interest, credit card commissions and annual revenues of the three core earnings model in China also failed to achieve good results. Conservative spending habits of consumers, the use of revolving credit ratio is very low, making it difficult for banks to obtain interest income; while intense competition among banks to get commissions from merchants far below the international level, no annual fee policy has also led to an annual fee income decreased year by year, these reasons have led to difficulties in the credit card business profitable.In this context, the paper on China’s credit card business, profitability analysis, investigate suitable for China’s credit card profit model undoubtedly has important practical significance.Paper as a background to the economics cost-benefit function, combined with China’s actual conditions, the credit card business to build a cost-benefit model and market position and development by choosing a different path from Bank A and Bank B as an example, using the model costs and benefits of the credit card business model, empirical analysis, summarized emphasis on marketing efficiency, reduce operating costs, improve the balance of outstanding loans accrued interest earnings ratio as a breakthrough in the credit card business.Finally, results of the analysis, this paper presents segment customer groups, enhance product innovation, backed by co m2sumer loans, credit cards, credit card overdraft consumption led to promotion to improve account management capabilities and service levels, improve risk management capabilities such proposal, and thus improve China the profitability of credit card products, and promote the healthy and sustainable development of the credit card industry to contribute.