Though credit cards are common in Japan, debit cards are hardly used there, according to a study Lafferty Group released last week.

There were just 218 million debit transactions in Japan last year, or less than one per card, the London research company found. In contrast, the average Japanese adult has six credit cards, and payment cards accounted for 12% of personal consumption, double the figure in 1996, the report said.

Credit card balances accounted for about 20% of all consumer loans in Japan last year.

Lafferty found that Japanese issuers have never used interest rates to compete for customers. Instead, the report said, issuers should target their marketing efforts at young people by promoting technological capabilities, such as mobile payments, and by promoting borrowing.

However, Lafferty also said that the Japanese card industry has had to change some policies in response to a law that caps interest rates they can charge and could require them to reimburse borrowers for past interest charges.

"Japan's largest consumer finance groups have undergone significant restructuring and have had to make large provisions to cover excess interest payment claims," the report said.

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