Research On Influencing Factors Of Credit Card Default Of Commercial Banks

The development of social economy has greatly changed the way of people’s life.The traditional financial management and consumption are greatly impacted.Compared with the traditional cash transactions,the credit card consumption has the advantages of simplicity,convenience and convenience.Therefore,the use of modern economic life is more and more widely.But credit card consumption and overdraft is a kind of loan consumption,and has the repayment risk.Therefore,the popularization of card mount and neglect of risk,often lead to greater financial risk.Combined with the outbreak of the international financial crisis,the non-performing loan ratio of commercial banks in China and the risk of commercial banks increased,more attention should be paid to credit card breach.Therefore,the study on the influencing factors of credit card default is of great practical significance.Taking the 188 default clients of X bank in 2016 as the research object,fourteen factors influencing the breach of contract are selected to make empirical analysis.Firstly,by the factor analysis,the factors are classified and named,so as to get the four dimensions of the breach: stability,economic strength,repayment willingness and characteristics.Secondly,based on probit model,the influence intensity and direction of related factors are studied by the marginal effect of each explanatory variable on the mean value.Thirdly,on the basis of correlation factors influencing strength ranking,the order of the above four dimensions is obtained.Finally,the original data is returned and the probability of loss type of each sample customer is obtained.Based on this,the default customer of X bank is classified and analyzed.After research,the following conclusions are reached.First,there are four dimensions of the credit card default: stability,economic strength,willingness to repay and self – characteristic.Second,customer stability and economic strength are its main influencing factors,the willingness of repayment and self – characteristic are secondary influencing factors.Third,educational background,real estate value and work type have the strongest influence on breach of contract,followed by gender,mode of repayment and difficulty of contact,and contact person is weakest.Fourth,for X bank,the probability of non-loss default is more than 74 percent,the amount is fully recoverable.The probability is less than 18 percent,the sum is irrevocable and bad debt loss should be withdrawn early.The probability is between 18 and 74 percent,banks should further assess their credit status in conjunction with cardholders’ other circumstances.At the same time,we should increase the dunning efforts to reduce the loss as much as possible.According to the conclusion,the countermeasures and suggestions are put forward from the following aspects.Strengthen the investigation of customer stability to achieve the smooth development of credit card business.Focus on customer economic strength identification,from the source of strict checks.Increase the willingness of customer to repay and reduce the occurrence of losses.Intensify the collection and strengthen the construction of the ex post mechanism.