Study On Credit Risk Management Of Chinese Credit Card

Since 2003, China's credit card market has been growing rapidly. With the wide dissemination of overdraft conception and commercial banks'actively marketing strategy, the domestic credit card business is rocket up. By the second quarter of 2010, total circulation of credit card in China has exceeded 200 million. To pursue high returns by overdraft interest rate, major commercial banks have established their own credit card center and consider the credit card business as a profit growth point which is extremely important. However, with trying to grab more of the credit card market, banks have not pay enough attention to the latent risk of credit card business, even fewer take blind expansion as their management ideas. Some branches of commercial banks have to complete the issuing task with neglecting the necessity of risk management coinciding with a large default risk of credit card staying in the banks, which will adversely affect the healthy development of entire credit card industry. The loss of credit card business, ninety percent of it, is caused by the credit risk, and credit risk has become the most aspects to prevent for card-issuing banks at risk management. In view of this, how to improve the level of credit risk management effectively will become the important way for commercial banks to enhance the core competitiveness.This text introduces the current situation of credit risk management in our country's credit card market firstly, and indicating that risk management at credit card approval procedures is the most direct and efficient credit risk management tools. Then this text analyze the applicability of credit score method in the management of credit risk assessment for customer, and use Logistic regression to build a credit risk scoring model for quantifying credit risk of the applicants. On this basis, according to empirical analysis of credit risk management on the actual operation data of bank credit card business, this text provides references for credit card approval of issuing banks. Then it summarizes and analyzes the mature experience on the credit risk management of credit card issuers in the U.S. Finally, based on comprehensive analysis of previously, the paper proposes some suggestions on further improving credit risk management of credit card.