If the central bank removes the upper and lower limits on credit card overdraft interest rates, the interest rates may not be lower. Recently, information released on the official website of the central bank shows that the central bank has issued the "Notice on Promoting the Market-Based Reform of Credit Card Overdraft Interest Rates." The notice pointed out that starting this year, credit card overdraft interest rates will be determined independently by card issuers and cardholders through independent negotiations, and the management of upper and lower limits on credit card overdraft interest rates will be cancelled. The lower limit is 0.7 times the daily interest rate, and the annual interest rate range is 12.775-18.25.

The credit card market complies with the new regulations, and interest rate range controls are lifted. It is reported that the profit model of credit cards is interest plus handling fees. After swiping the card, the cardholder does not need to pay any interest for repayment during the interest-free period, which is up to 50 days. However, after the interest-free period, if the cardholder does not repay in full and chooses to overdraft, an overdraft interest rate will arise. Generally speaking, overdraft rates are much higher than bank loans over the same period. A reporter from the Chinese Business Daily checked the official websites of many banks and found that the current bank credit card overdraft interest rate is basically calculated based on the daily interest rate of 5/10,000, that is, the annual interest rate is 18.25.

Why did the central bank cancel the credit card interest rate range control also attracted attention in the industry? The central bank issued the "Notice on Matters Concerning the Credit Card Business" and subsequently implemented it. The unified standard for credit card overdraft interest rates will be cancelled, and upper and lower limits on credit card overdraft interest rates will be implemented. The upper limit of the overdraft interest rate is 0.5 times the daily interest rate, and the lower limit of the overdraft interest rate is 0.7 times the daily interest rate. The relevant person in charge of the central bank also made it clear that when the time is right, market pricing will be fully implemented. According to senior credit card researchers, the sudden promulgation and emergency implementation of the "Notice" and the clean-up and rectification of the online small loan market will loosen the credit card business and completely release the constraints of credit cards on overdraft interest rates, which reflects the importance of the central bank. Firm determination to shape the position of credit card business in the field of consumer finance.

It is worth mentioning that the Supreme People's Court recently issued the "Regulations on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases" (hereinafter referred to as the "Regulations"), which will come into effect from now on. The "Regulations" clarify the judicial protection limit for private lending interest rates based on four times the one-year loan market quoted interest rate LPR. The current one-year loan market quoted interest rate four times is 15.4. It can be found that the current bank credit card overdraft interest rate is higher than the upper limit of private lending interest rate. There has been controversy in the industry as to whether the above provisions apply to banks and other licensed financial institutions. Against this background, what impact will the marketization of credit card overdraft interest rates have on banks? Will the bank adjust the overdraft interest rate? In this regard, the chief banking analyst of Soochow Securities said that commercial banks are not expected to raise interest rates on a large scale, but they may increase interest rates for some customers with poor risk performance to achieve a match between risks and returns. Some banks may lower prices for prime customers to break through the previous lower limit of interest rates, but prime customers have a lower proportion of interest-earning assets, so the actual impact is expected to be limited. Overall, head office retail banks can price credit card business more flexibly and benefit from interest rate liberalization.