“If the down payment is not enough, use a credit card to make up the down payment” is a “sharp tool” for many home buyers to raise the down payment. This method magnifies the financial leverage of the home buyers and increases the repayment burden of the home buyers. Greater financial risks are also brewing.

In this context, since August, the credit card centers of many banks such as Agricultural Bank of China, China Construction Bank, China Merchants Bank, Industrial Bank, Ping An, and China Everbright have successively issued announcements requiring tightening of credit cards for real estate merchants. Some banks are Quotas are limited, and some transactions are prohibited.

1

Credit card “housing” transactions are restricted

According to Beijing Youth Daily, since August, many banks have issued announcements to strengthen real estate merchants. Management of Transactions. Some have comprehensive restrictions on real estate merchants, and some banks set transaction limits for specific categories of merchants. The restricted real estate-related merchant categories mainly involve 5 residential and commercial real estate development (merchant category code 1520), real estate agency-real estate brokerage (merchant category code 7013), construction engineering (merchant category code 7013) Code 1771), timeshare villas or vacation rentals (Business Category Code 7012), and real estate management-property management (Business Category Code 6513).

Different banks have different restrictions on these merchants:

Residential and commercial real estate development (merchant category code 1520), real estate agency-real estate brokerage (merchant category code 7013) These two categories are prohibited from trading because they can buy houses.

Construction projects (merchant category code 1771) and time-share villas or vacation homes (merchant category code 7012) are prohibited by some banks and restricted by some banks.

Real estate management-property management (merchant category code 6513) is what everyone needs for daily payment. You can overdraft the card but there is a limit.

The author learned that, taking China Merchants Bank as an example, on September 27, the Credit Card Center of China Merchants Bank issued an announcement stating that the bank’s credit cards cannot be used at three types of real estate merchants (merchant category codes are 1520, 1771, and 7013). Transaction; set transaction limits for property and time-sharing merchants (such as merchant category codes 6513, 7012, etc.). When customers use this bank's credit card to make transactions at these merchants, the transaction may fail.

Image source: China Merchants Bank Credit Card official website

The Agricultural Bank of China and China Construction Bank directly gave the amount of relevant business restrictions:

The Agricultural Bank of China credit card is not allowed to be used by domestic developers Transactions are conducted with real estate agencies (merchant category codes: 1520 and 7013); the amount of a single transaction with the remaining three categories of domestic real estate merchants (merchant category codes: 6513, 1771, 7012) shall not exceed RMB 15,000. The cumulative transaction amount shall not exceed 15,000 yuan, the monthly cumulative transaction amount shall not exceed 50,000 yuan, the quarterly cumulative transaction amount shall not exceed 50,000 yuan, the half-year cumulative transaction amount shall not exceed 50,000 yuan, and the annual cumulative transaction amount shall not exceed 50,000 yuan. Ten thousand yuan.

Image source: Agricultural Bank of China Credit Card Official Website

CCB Credit Card announced that the bank’s credit cards are not allowed to be used for transactions with three types of real estate merchants in the country (merchant category codes are 1520, 1771, and 7013). Transactions by domestic property management and leasing merchants (merchant category codes 6513 and 7012) will be controlled on a customer basis: the amount of a single transaction shall not exceed 30,000 yuan, the daily cumulative transaction amount shall not exceed 50,000 yuan, and the monthly cumulative transaction amount shall not exceed 50,000 yuan. The amount shall not exceed RMB 50,000, the cumulative transaction amount in half a year shall not exceed RMB 50,000, and the annual cumulative transaction amount shall not exceed RMB 100,000.

Image source: China Construction Bank official website

According to Beijing Business Daily, an industry insider analyzed that the main reason why banks tighten credit card transaction limits at real estate merchants is that they are afraid of users borrowing credit cards. Speculate houses and collect down payment.

"Although credit card limits ranging from tens of thousands to hundreds of thousands of yuan are not enough to buy a house in first- and second-tier cities, in many third- and fourth-tier cities now, it is possible to buy a house with a total price of hundreds of thousands of yuan using multiple credit cards. For real estate speculators.” In some commercial and residential properties with lower total prices, sales staff still recommend paying for the house through a large credit card.

2

Intermediaries and real estate agents responded like this

According to Sino-Singapore Jingwei, many intermediary companies and sales offices currently indicate that they do not accept credit cards for house purchases. "You cannot buy a house with a credit card. The sales office does not accept credit card payment. When you go to the bank to pay the down payment, the bank will review the source of the down payment." Xiaojun, a real estate agent, said.

Xiaojun said that even if the money in the credit card is swiped out in other ways, as long as you buy a house or apply for a mortgage under the name of the cardholder, the money is considered a liability. When applying for a loan, the bank sees how many If you have outstanding balances on all credit cards, your ability to repay will definitely be doubted; and if the date of credit card swiping is close to the date of purchase, the bank will also suspect that the credit card funds were used for down payment. Nowadays, supervision is very strict, and your application for a down payment loan is likely to be rejected.

In first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen, not only do you have to pay millions of dollars in total to buy a house, but you also have to pay a large intermediary fee to buy a second-hand house. It is understood that the current second-hand housing agency fees in Beijing range from 2 to 2.7. If you buy a second-hand house worth 5 million yuan, you need to pay an agency fee of 100,000 yuan to the agency based on 2 agency fees.

Currently, intermediary fees can be paid by credit card. Xiao Dong, a real estate agency, said that previously, the single limit for most banks’ credit cards for real estate agents and brokers was 100,000 yuan, which can basically meet the needs of home buyers with a total house payment of less than 5 million yuan.

“However, we do not recommend that customers use credit cards to pay intermediary fees and try to use credit cards as little as possible before loan approval, because large credit card payments may affect loan review qualifications.” Xiao Dong emphasized.

Property companies have stated that they can support payment of property fees by credit card. Most property owners’ property fees are within the limit and are basically unaffected.

In terms of renting a house, a Ziroom housekeeper said that tenants can transact with the agency through an online APP. They only need to bind a credit card through Alipay or WeChat to pay the rent with a credit card.

3

Expert: As a prelude to controlling credit card risks

It is precisely because of the hidden dangers of credit card overdrafts for house purchases that supervision has focused on punishing related behaviors:

According to the administrative penalty information released by the regulatory authorities on August 9, the Shenzhen Branch of China Guangfa Bank was sanctioned by the Shenzhen Banking and Insurance Regulatory Bureau for illegally misappropriating personal comprehensive consumer loan funds and credit card overdraft funds to purchase houses or pay related expenses. A fine of 400,000 yuan was imposed. On August 13, the Shenzhen Branch of Agricultural Bank of China was fined 800,000 yuan by the Shenzhen Banking and Insurance Regulatory Bureau. One of the reasons for the violation included the flow of credit card overdraft funds to the real estate market.

According to a report by 21st Century Business Herald in September, at the end of July this year, regulators summoned some bank managers to Beijing for a meeting, requiring banks to control the credit card business, not to increase the size of the credit card business in the second half of the year, and not to issue assessment indicators. "The main thing is to control risks. We are now strictly investigating the flow of credit funds and focusing on supervising illegal credit."

The author noticed that at the end of August this year, the Beijing Banking and Insurance Regulatory Bureau issued the "Regulations on Strengthening the Prevention and Control of Bank Card Risks" "Supervisory Opinions", 5 of the 13 regulatory measures directly refer to the credit card business, one of which mentions "strengthening the monitoring of credit card fund flows":

Commercial banks within the jurisdiction should strengthen the supervision of large overdrafts and credit card transactions. Monitor the flow of funds in cash installment business, and require customers to provide invoices and other shopping vouchers when necessary to ensure that personal credit card overdrafts are used in the consumption field and cannot be used in non-consumption fields such as production and operation, house purchase, and investment.

Image source: Beijing Banking and Insurance Regulatory Bureau official website

According to Beijing Youth Daily, senior bank expert Dong Zheng believes that there have always been controls on the inflow of credit card funds into real estate, and supervision has become stricter recently. On the one hand, it is the policy reason for real estate regulation, and on the other hand, more importantly, it is the prelude to credit card risk control in the second half of the year.

Dong Zheng pointed out that after the explosive growth in the past period, the growth rate of bank credit cards has slowed down since this year, and credit card delinquencies have increased. Some banks have even blocked cards or reduced their credit limits on a large scale, and adjusted their credit card business structure. . In his opinion, from the perspective of risk forms, the risk forms of credit card business in recent years are different from those before, mainly reflected in the investment field, such as P2P, real estate, etc. The focus of the bank's credit card business in the second half of the year is to control risks of indigestion, and controlling consumption in the real estate sector is an important part of it.