Friday, October 24, 2008

In China, It's Pay Your Credit Card Bill -- or Else


I think we have it pretty good in the United States. That's my conclusion after reading a Los Angeles Times story that detailed the Chinese credit card industry. In China they don't mess around. If a card user intentionally defaults on a debt as little as $3,000, that person could be sent to prison for five years -- assuming the leg breakers don't catch up with you first. If you're lucky, you might only get your name listed in the newspaper -- publicizing the fact that you are a deadbeat.

From the story: China charges into credit cards (link here)

Among Chinese credit card users, more than 70% pay the entire balance every month, says Nie Junfeng, a manager in the Bank of China's personal finance department. "This may be related with the tradition that Chinese people, as the saying goes, don't like eating next year's food this year," he said.

But the young generation is different, he said. "They're more comfortable spending tomorrow's money today."

Indeed, the rest of the story details what happened to a man who belongs to China's younger generation. Let's just say that one card company wasn't letting this guy off the hook.

Related Articles:

  • Chasing The Balance -- What It Is And Why It Sucks

  • During the Credit Crunch, Work That FICO Score

  • American Express Appears to be Stepping Up Its Slash and Burn Campaign

  • Paying in Full is Not Only Good For Your FICO Score -- It's Good For Your Piggybank Too


  • 6 comments:

    1. If the CAs had their way here, you could bet that they'd jump on that.

      But of course, state and federal rules won't let them. I'm a somewhat morbid person. It'd be real entertaining to see some of the stateside collectors adopting Chinese collection tactics.

      That said, I hope that those aforementioned collectors don't mind collecting a few bullets in their body. I hear it's quite legal in some states and communities under certain conditions. ;-)

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    2. I know where to find work now.

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    3. With more cards being issued, there should definitely be more work for collectors there, V.

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    4. I don't know that it's such a bad idea overall. I can't help but think that the Chinese mindset towards credit (as it used to be in the US pre-1960) would have prevented today's financial mess.

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    5. Remember, "He's fierce. He's unstoppable. He's real. Run!"

      :-D

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    6. Anon, those collection practices are a terrible idea. There is no need to humiliate and treat a person cruelly simply because they fall on hard times.

      Banks doing their job would have prevented our current problems. Don't lend to someone who can't afford the payments. Don't lend to someone who has a history of not paying. Don't lend to someone who doesn't have a job....but certainly don't lend to these people and then be shocked when they can't (or don't) pay.

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