The Empirical Research On Default Risk Of Chinese Credit Card Installment Payment

With the increasing development of credit card industry in our country,credit card industry has become an important part of intermediary business ofbank. Credit card industry faced profit pressure with market saturation andcommission fee reduction policy. To deal with the difficult situation, Bankslaunched credit card installment through support of credit limit. Credit cardinstallment has become the main source of revenue growth of credit cardindustry. In the initial stage, default risk of installment is lower than ordinarycredit loss, but it grows rapidly with time. Some risk traits such as lack ofcollateral, huge amount differs credit card installment from individualconsumption credit. The domestic existing researches on default risk ofChinese credit card installment are few.This paper first introduces the credit card installment and the related researches，then discusses the development of credit card installment andrisk management condition. Different risk traits are compared between creditcard installment and individual consumption credit.6000clients recordsrandomly selected from real bank records to be analyzed through differentinfluence factors as age, income, gender, education level, credit limit,transaction amount, way to collect commission fee and term. The logisticregression model are used to find impact of factors to default risk.Through the test, we find that factors mentioned above affect defaultrisk of credit card installment as same as credit car ordinary consume, whichprovides useful references to credit scoring and the price mechanism ofinstallment. Combined with the risk characteristic of installment, somesuggestions of credit card risk management are provided.