Legal analysis: On April 20 16, the People's Bank of China issued the Notice of the People's Bank of China on Credit Card Business, which took effect on October 20 17 10. The Notice requires the upper and lower limits of credit card overdraft interest rates to be managed. The upper limit of overdraft interest rate is five ten thousandths of daily interest rate, and the lower limit of overdraft interest rate is 0.7 times of daily interest rate. Mainly based on the following considerations: First, the implementation of step-by-step reform will help card issuers to further accumulate pricing data and experience during the transition period and guide them to improve the credit card interest rate pricing mechanism. Second, the risk control ability and pricing ability of credit cards of various card issuers are uneven. Guiding the upper and lower interest rates will help prevent individual card issuers from blindly reducing prices and fighting price wars, which will lead to unfair competition and excessive borrowing by high-risk customers, thus increasing credit risk and causing local market chaos. Third, under the circumstance that the information disclosure mechanism needs to be strengthened, setting an overdraft interest rate ceiling will help prevent individual card issuers from unreasonably charging excessive interest and protect the legitimate rights and interests of cardholders.

Legal basis: Provisions of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases.

Article 27 After the borrower and the borrower settle the loan principal and interest in the early stage, the interest shall be included in the loan principal in the later stage, and the creditor's rights certificate shall be reissued. If the interest rate in the early stage does not exceed four times the market quotation of the one-year loan when the contract is established, the amount specified in the reissued creditor's rights certificate can be confirmed as the loan principal in the later stage. The overcharged interest shall not be used as the loan principal in the future.

According to the calculation in the preceding paragraph, if the sum of the principal and interest that the borrower should pay after the expiration of the loan term exceeds the sum of the interest of the whole loan term based on the initial loan principal and calculated according to the market quotation of the one-year loan at the time of the establishment of the contract, the people's court will not support it.

Article 28 If the borrower and the lender have an agreement on overdue interest rate, such agreement shall prevail, but it shall not exceed four times the market interest rate of one-year loan at the time of the establishment of this Contract.

If the overdue interest rate is not agreed or clearly agreed, the people's court may handle it according to different circumstances:

(a) the people's court shall support the lender's claim that the borrower should bear the liability for breach of contract for overdue repayment with reference to the interest calculated by the one-year loan market at that time from the date of overdue repayment;

(2) If the interest rate during the loan period is agreed, but the overdue interest rate is not agreed, the people's court shall support the lender to claim that the borrower shall pay the interest during the capital occupation according to the interest rate during the loan period from the date of overdue repayment.

Article 29 The lender and the borrower have agreed on overdue interest rate, liquidated damages or other expenses. The lender can choose to claim overdue interest, liquidated damages or other expenses, or both, but the people's court will not support the part that exceeds 4 times the quoted interest rate of the one-year loan market when the contract is established.