Study On The Default Risk Of Personal Credit Card Loans

As an important tool in financial payments, the Credit card has being used in China for only 30 years. However, in such short period, it has experienced an explosive growth in both the market share and the quantity of cardholders. Such fast development has brought not only an increasing in the income of commercial banks, but also higher risks in financial bank personal credit card loans. Affected by the slow descending in China’s economic growth, problems that have being ignored in the fast developing years of credit card business begin to emerge, such as lagging in credit assessment technology, insufficient post-management of credit loans, the out-of-sync in the developing speed between the risk management of credit card and the card business, and so on. Being aware of these problems, a series of exploratory attempts and innovations has been put into action by domestic commercial banks.In this paper, the credit assessment and risk management in personal credit card loans were discussed. Some issues that the author has encountered in his work and further ideas were also included. Firstly, a brief introduction towards the classification and causes of credit card risks and related theoretical studies are posted. Then, based on the current development status of credit card in China, together with a research on the mechanism and current status of commercial bank card risk management, the current status of China’s credit card risk management and some existing problems were summarized After that, theoretical analysis were performed and a regression model was built. With data obtained from a commercial bank, an empirical analysis was also performed. Finally, according to some results drew from the analysis, some comments and suggestions towards risk management on China’s credit card loans were posted.