Hello, Futures Xiaochu, as a so-called old man who has been engaged in the financial industry for more than ten years and a national financial planner, started with his first credit card in 2006. At most, he had more than a dozen credit cards. A standard credit card expert with more than ten years of experience in using credit cards will briefly answer this question

First, let’s understand the concept of credit cards

The credit cards stipulated in the relevant laws of our country refer to commercial credit cards. An electronic payment card issued by a bank or other financial institution with all or part of the functions of consumer payment, credit loan, transfer settlement, cash deposit and withdrawal, etc.

A credit card, also called a credit card, is a credit certificate issued by a commercial bank or credit card company to consumers with qualified credit. It takes the form of a card with the name of the issuing bank, validity period, number, cardholder name and other contents printed on the front, and a magnetic stripe and signature strip on the back. Consumers holding credit cards can shop or consume at specially appointed commercial service departments, and then the bank will make settlements with merchants and cardholders. Cardholders can overdraft within the prescribed limit.

Credit card consumption is a non-cash transaction payment method. There is no need to pay cash when consumption, and repayment will be made on the bill date.

Secondly, let’s understand the reason why “a large number of young people have developed a credit card debt crisis”

Under normal circumstances, credit cards have many benefits, such as emergency use, interest-free consumption, etc. etc., is also a symbol of a person's credibility. However, as young people born in the 1990s have become the mainstream group of social consumption, all this has changed, and credit cards have gradually become synonymous with "advanced consumption".

According to the latest data released by the central bank, the bad debt rate of bank credit cards reached a record high last year. Among them, Shanghai Pudong Development Bank has been "unable to stop the car" for two consecutive years, and its bad debt rate has increased rapidly. We must pay attention to this phenomenon, because an excessively high bad debt rate is a very dangerous situation.

What is even more worrying is that many young people have become the main force in credit card debt. Because the concept of consumption is still immature, it leads to blind consumption and premature consumption. In addition, income is not proportional to consumption, which ultimately leads to a significant increase in credit card debt. The large number of young people carrying credit card debt is actually tantamount to greatly overdrafting the endogenous driving force for the country's future development and growth.

Especially some post-90s groups, if the borrowed money is used for reasonable consumption, then there is nothing to say. However, most of the post-90s generation have actually formed the bad habit of excessive consumption. For example, some people born in the 1990s may have just started working and have a monthly salary of only about 3,000 yuan, but they use credit cards and other loan products to buy bags, electronic products, etc. worth tens of thousands of yuan. There are also some people born in the 1990s who think they are smart, tearing down one wall to make up for the other, using Huabei to pay back borrowed cards, and using borrowed cards to pay off credit cards. Repeatedly, this eventually creates a vicious cycle.

The third return to this question is "A large number of young people are in credit card debt crisis, and banks are still crazily promoting credit cards. What do you think?"

The increase in the use of credit cards is beneficial to young people. There are also disadvantages. The consumption method of credit card has been deeply rooted in the lives of our younger generation, symbolizing a new era and new life. This new consumption method brings a lot of convenience and may also bring a lot of troubles. burden. Improper use or overuse will bring a certain burden to yourself, which may make the pressure you can withstand worse; if used correctly, it will bring positive effects and make your life better. So it has to be analyzed and understood from the opposite aspects.

Banks promote credit cards because they are related to performance. If a bank successfully promotes credit cards to customers, its performance will increase accordingly.

For banks, consumers applying for bank cards also increases the probability of using them. After all, there are many activities for credit cards, and points are often exchanged for gifts. These activities will also cause consumers to spontaneously recommend the products to their surrounding friends, which invisibly increases the consumer base. Furthermore, for the convenience of repayment, many people often associate their bank’s debit card with automatic repayment. The money on the debit card belongs to the consumer's savings deposit. In this way, consumers' money will basically be stored in debit cards and they will become active users of the bank. For banks, deposits are also one of the important sources of profits for banks. Many financial activities of banks are based on deposits.

During an epidemic, a large number of young people experienced a credit debt crisis. Major banks also introduced policies to withdraw funds. The results can be imagined! Bad debts are increasing! National policy strictly prohibits loan sharking, but currently various campus loans and cash loans are still emerging in endlessly. In December 2019, credit card repayment policies were adjusted, and major banks also adjusted their policies accordingly. I believe that many friends have more than one credit card, but they are facing overdue , all kinds of collection calls will make people very distressed. Faced with so many overdue bad debts, banks are also crazy about promoting credit cards. It only means that it is profitable. The profits are too huge, and they are no different from private loan sharks. Nowadays All major banks are promoting credit cards. Does the China Banking Regulatory Commission need to regulate them?

This issue still touches me deeply.

One is having multiple bank credit cards, and the other is engaging in the financial loan industry.

When I graduated in 2012, I just entered the workplace. Under the influence of my colleagues around me, I applied for my first credit card, a CITIC Credit Card for 6,000 yuan. The reason is that colleagues nearby said that it can be used in emergencies, and you can earn points by swiping your credit card on a regular basis, and get discounts on purchases in shopping malls. I was more interested in this and applied for my first card. In fact, Alipay and WeChat Pay were not yet popular at that time, and consumption could only be done through merchants’ POS machines. Later, because I couldn’t feel the pressure of using paper money, I thought it was just a number. In the next few years, I successively applied for credit cards from China Construction Bank, China Merchants, China Guangfa and other banks, and the limit was basically only around 30,000. Because my income is relatively good, I rarely use credit cards. Later, with the popularity of Alipay and WeChat Pay, and the popularity of hand-swiped POS machines, credit cards can be directly bound to Alipay and WeChat Pay to make direct payments, and there are more activities brought about by points. So I use it more diligently. In 2020, since the beginning of the year, due to the impact of the epidemic, income has dropped sharply, and there are still car loans and house loans that need to be repaid. In addition, my own consumption is relatively high, and the use of credit cards continues to increase. So far, I have 5 credit cards and have used about 50,000 credit cards. And there are other banks in the market that are constantly calling or sending text messages, inviting people to apply for new credit cards and offering installment credit lines. Unknowingly, my debts have increased a lot, and I feel more and more pressure. Now I am trying to find ways to get rid of my debts and make my life easier.

According to friends who work at Everbright or Ping An Credit Card Center, the bank’s job requirements are how many customers to visit every day and how many cards to open every week. There are rigid index requirements. If you fail to meet the requirements, you will either get a basic salary or even dismiss. So start with friends and relatives around you and continue to complete the task of opening a card. Every time a credit card is swiped, the card issuer gets a certain percentage of revenue. In addition, if you repay the minimum credit card amount, the interest rate is as high as 1.5% per month, and the credit card limit is relatively low, which means the risk is smaller for the bank. Therefore, the credit card business is a good profit point for banks, so they are crazy about promoting credit cards. Those who have more demand for credit cards are young friends who have just graduated or have been working for a few years, and they are also people with certain academic qualifications or good credit card usage records. This can determine the repayment willingness and credit awareness of card users. Young people are conscious of consumption and consume high amounts, but their income is unstable and they have no savings, so they use credit cards frequently. Under the influence of the continuous attraction of merchant consumption and payment methods, young people are increasingly daring to consume ahead of schedule, and financial institutions are also willing to support the development of consumer finance. As a result, the current generation of people born in the 80s, 90s and 2000s have a rising per capita debt and are falling into a credit card debt crisis.

This consumption concept will make life increasingly difficult for young people. Similar to the consumption concept in Europe and the United States, once a natural or man-made disaster similar to the epidemic occurs, it will cause serious social problems. The increasing non-performing rate of banks and the increasing number of dishonest people in society. The government should introduce policies to ingrain the concepts of diligence, thrift, and hard work into the minds of young people and establish a correct outlook on consumption.

Let’s first talk about why most young people fall into a credit card debt crisis:

1. Social overload, work pressure, and emotional emptiness all consume our limited energy. Through repeated wear and tear, we have adapted to the rhythm of life, but we have become unable to please ourselves. Whether it's physical or mental, they have some strange illnesses, stay up late and eat too much, etc. Many people mock themselves as "fat nerds", but there is actually a hint of helplessness behind this.

2. The entire society and the environment also have certain responsibilities. They are all promoting the consumption boom and stimulating consumption without exception. Constantly being encouraged by advertisements and APP promotions to complete consumption behavior, it will slowly make you drift with the crowd, form a habit of thinking, and further reduce your ability to self-criticize and examine. They unscrupulously associate consumption with identity, class, taste, IQ, etc. At the same time, by vigorously promoting "consumerism", young people are more likely to gradually lose themselves. For example, Double 11 and Double 12 are being warmed up a month in advance, which makes it even worse for us who already have a small balance. It creates the illusion that you will be happy only if you buy and buy. When we are young, we are still wandering at the door of adult society, but our material desires are growing like weeds, but we do not yet have the matching ability to make money, and our self-control ability is poor. The debt itself has its own reasons, and the entire social environment also has unshirkable responsibilities.

According to survey data from the Boston Consulting Group, from 2016 to 2021, the consumption of young people in China increased at a rate of 11% year by year. The consumption of young people under the age of 35 accounted for 65% of the total consumption growth. China Millennials have become the dominant force in the consumer market.

At the same time, the "Report on the Debt Situation of Chinese Young People" pointed out that nearly 60% of those born in the 1990s have substantial debts, and consumption upgrading has become a common phenomenon. Among them, credit consumption has become the main way to upgrade consumption, accounting for than 86.6%.

Let’s talk about why banks promote credit cards:

1. Merchant commission income

If a credit card is used for settlement when paying, the merchant will need to pay a certain amount Handling fees, this part of the rebate income is distributed to the acquiring bank, card issuing bank, and card organization according to a certain proportion. The handling rate of credit cards is significantly higher than the handling rate of debit cards, so if the cardholder uses a credit card of a certain bank , then the card issuing bank will receive commission income from the cardholder’s transaction merchant.

2. Interest income

With the continuous development of the credit card market, interest income has become one of the most important sources of income for card issuers.

Interest income refers to the income from interest charged on all or part of the bill if the full amount is not repaid on the due date and there is still unpaid debt in the account. The daily interest rate is generally It is 5/10,000 (i.e. 18% annualized, compounded monthly).

Compared with ordinary loans, the annualized interest rate of credit cards is much higher. As the number of cardholders increases, the number of people with overdrafts gradually increases, and the bank's interest income also gradually increases.

3. Fee income

Fee income is mainly divided into the following categories: installment fees, cash withdrawal fees, cash advance fees, etc. The fee rate is slightly lower compared to the interest rate noted above. Take the installment fee as an example. Banks usually give fixed-term rates. For example, the number of installments available for China Merchants Bank ranges from 2, 3, 6 to 36 installments, and the interest for each installment is also different. Generally, In this case, the longer the installment, the lower the interest rate.

In order to encourage cardholders to use more installment, cash withdrawal and other services, banks also provide many preferential activities, so installment, cash advance, etc. are used by more cardholders.

4. Annual fee income

Under the pressure of competition in recent years, various banks have launched many credit cards with no annual fees, but most high-end credit cards (Platinum Card, Diamond Card card, unlimited card, etc.) still charge an annual fee. Cardholders of high-end credit cards can enjoy various services provided by banks, such as airport VIP lounges, medical services, exclusive customer service, sports and fitness, etc. They also need to pay higher annual fees for these services. The annual fees of high-end credit cards are average. Starting from 2000, it is usually a rigid charge.

5. Others

In addition to the above-mentioned main income components, banks can also make a small profit in other aspects.

For example, charging card production fees for certain credit cards with special card faces, sales revenue from self-built e-commerce platforms, etc. Many card issuing banks already have the awareness to guide cardholders to consume on self-built e-commerce platforms. For example, China Merchants Bank Mobile Life often launches activities that offer free installments for purchases in online shopping malls. More and more consumers have begun to use card issuing banks’ Build your own e-commerce platform.

Since the credit card market is so profitable, major banks have no reason not to promote their own credit cards crazily.

In front of capitalists, all issues are not as important as interests, not to mention that due to the epidemic that started last year, major banks were frantically promoting credit cards while frantically withdrawing funds. Now the young people who are in debt are a little careless. , there is an abyss ahead.

Whether you are applying for a loan or a card for consumption, you are borrowing money from the bank, and the borrowed money always has to be repaid. You must determine the amount of borrowed money and the length of use period based on your expected near-term or long-term income and repayment ability, what you will use it for, and how much return you can get.

Especially for credit card consumption overdrafts, the goal is mainly for short-term emergency use. For example, you need to calculate how much principal and interest you can repay after one year's income and expenditures to determine the borrowing amount, and installments to each How much can you repay each month and quarter? Debt is like a person carrying a burden. You need to know how heavy a burden you can carry. If you can carry 200 kilograms for a long time, it is good if you only carry 150 kilograms or 180 kilograms. If you don't carry it, you will never know how much you can carry. How great is the ability. If the weight is too heavy, your body and bones will not be able to bear it. The best weight is the one that suits you.

There are many reasons for young people’s credit card debt crisis, and we will not make a detailed analysis here. Let me focus on analyzing: the specific reasons why various banks promote credit card applications!

The reason why banks always promote credit cards is because it is related to performance. The bank has successfully promoted credit cards to customers, and if the customers apply for them, the performance will increase.

And applying for a credit card can help increase user stickiness. Because credit cards often provide many activities, such as redeeming points for gifts, customers participate in the activities, the cooperative merchants make profits, and the bank can also obtain a certain amount of profits. And if customers recommend these activities to their friends, they will also increase their consumer base invisibly.

In addition, many people will associate their bank’s debit card with their credit card for automatic repayment. In this way, customers will continue to deposit money into their debit cards, and savings deposits are also one of the important sources of profits for banks.

In addition, banks can make relatively large profits by promoting credit cards to consumers. After all, many credit cards charge annual fees, and many credit card businesses charge certain handling fees, such as cash withdrawals and installments.

If the credit card is not repaid in full within the specified period, the bank will charge interest.

I have always been curious, even though the business modules are all the same and they are all overdrafted, why are there so many cards?

Pile various snacks in front of a child and tell him, "Eat less snacks and drink more boiled water..."

Isn't this fart?

It is the fault of a son not to teach his father!

1. Young people consume without bottom line and have no respect for the results. 2. Over-management. Some people choose to do business, thinking that it is easy to do business. In fact, if they can't do business well at work, it will definitely not be successful. Moreover, they are very persistent, and they will definitely be heavily in debt in the end.

Banks crazily recommend credit cards

The reason for this is that the return of funds from mortgage loans is slow. For a mortgage of 1 million yuan, it basically takes 20-30 years to complete the return of funds. A 1 million credit card can be distributed to hundreds of people, and with one monthly repayment, the return can basically be completed. Once something is overdue, there will be additional income. In this way, the bank's profit will be relatively high. The bank's money is not blown by the strong wind. If there is profit and income, it will naturally increase its promotion efforts.

Secondly, it increases user stickiness. In fact, credit cards are dispensable for many people. Many people follow the trend when applying for credit cards. However, for banks, when consumers apply for credit cards, it also increases the probability of using them. After all, credit cards are used for many activities and often Points will be exchanged for gifts, and these activities will also cause consumers to spontaneously recommend it to their friends, which invisibly increases the consumer base.

Furthermore, for the convenience of repayment, many people often associate their bank’s debit card with automatic repayment. The money on the debit card belongs to the consumer's savings deposit. In this way, consumers' money will basically be stored in debit cards and they will become active users of the bank. For banks, deposits are also one of the important sources of profits for banks. Many financial activities of banks are based on deposits. Therefore, whether you use a credit card or a debit card, it is a source of profit for the bank.

I sat and watched