Commercial Bank Credit Risk Management Of Credit Card Business

The credit card business in China has witnessed over twenty years' development. Till the year of 2010, the issuance volume of credit cards has reached up to 230 million, and the trading volume has amounted to 5.1 trillion RMB. The rapid development of the credit card business, on the one hand, has led to our country's fast economic development; on the other hand, it also incurs huge credit risks for banks. In recent years, commercial banks in China has gradually raised their awareness of managing the credit risk, constantly strengthened credit risk management of the credit card business, and improved the capacity to keep the credit risk under control. Based on the analysis and study of advanced credit risk management theories of credit cards at home and abroad and through questionnaires and detailed case studies of specific banks, this thesis, from the two perspectives of consumer groups and the bank inside, analyzes the causes and solutions of the credit risk, and finally draws the conclusion.In the study, we found that, the bad debt expenditure incurred by the credit risk, which also affects the major profit source of credit card, that is, the interest yields, is the main expenditure of credit card business; therefore, the credit risk is the major risk of credit card business. The major problems faced by the credit risk management of our country's credit card business cover low access threshold for banks to issue credit cards, inadequate integrity system, information asymmetry, imperfect legal system and backward risk management technology as well. The corresponding preventive measures thus proposed include two following aspects:optimize commercial banks external environment construction, including legal system's standardization, the improvement of individual integrity system, the establishment of sound credit culture etc. In the internal side, commercial banks are supposed to improve the internal management systems, including establishing credit risk management framework, upgrading the credit risk management technology and so on. In this way, it would help minimize credit cards' credit risk.