Research On China's Commercial Bank Credit Card Risk Management Strategy

The global financial crisis erupted in 2007 started a series of great shakes of the world finance industry, with the damage to the world's economy exceeded everybody's expectation. What's worth our deep thinking is how did the 600 billion secondary funds shake the world's financial foundation? We can see that only capital adequacy rate can't guarantee the stability of single banks, not even that of the banking system. The problems of the financial industry are represented not by credit risk or market risk, but are resulted by the integrated effect of credit risk, market risk and operational risk. On October 1st,2002, Basel Committee issued the amended New Basel Capital Accord, mainly indicating 3 points, including the lowest capital level, the supervision and examination of supervision department and market restriction. And the banking industry entered total risk administration era.Along with the development of the economic system, the banking industry adjusted the traditional business and profit model with interest difference between deposit and loaning as main income resource. The immediate business and off-balance sheet business developed rapidly, and the non-interest income took more and more proportion in the operating revenue and turned the corporate business to personal business gradually, indicating that the future competition will focus on the ever-growing personal business mainly. And credit card is the comprehensive carrier of the personal banking business. The credit card business can bring more income for commercial banks from higher interest, interchange fee and commission fee. There is no doubt that commercial banks'competition will be represented by the contest for the credit card business. But the commercial banks should be aware of the credit card risks along with the fierce competition.This paper classifies the problems on credit card risk management into the following parts:1 introducing the research background and meaning, research method, content and thought and the development process of credit card; 2 defining the credit card risk and classifying the risks into four categories including card-holder credit risk, criminal cheat risk, special businessmen operational risk and card issuer inner-operational risk and analyzing the reasons for the risks; 3 analyzing the current credit card business situation in China, and finding the basis for credit card risk management strategy by researching the case of credit card management of China Construction Bank XX Branch; 4 building risk management strategy for China's commercial bank and presenting suggestions on implementation process of the risk management strategy for the commercial banks.