Debt-ridden Taiwanese credit cardholders now are subject to new regulations designed to lighten their financial burdens, an official from the Financial Supervisory Commission, the country’s financial regulator, tells PaymentsSource.
“Under the new regulations, qualified cardholders will be allowed to renegotiate repayment plans for cash advances with durations of between six and 30 months,” he says. And if cardholders pay in full ahead of preset installments, banks will not charge them any fees, says the official.
“The new regulations apply to all cardholders who have activated revolving credit services for more than a year and have no past record of delinquency,” he adds. “Cardholders who owe more than NT$100,000 (US$3,189 or 2,390 euros) in revolving credit will be allowed to negotiate to repay debt in as many installations as they can afford.”
Also, the new regulations will forbid cash card issuers to offer more than 10% of a new cash card holder’s maximum credit in cash, the official says. Cash cards in Taiwan are similar to credit cards except issuers usually market them to subprime customers.
An official from a Taipei-based bank, who did not want himself or the bank to be identified, welcomed the move, saying the new rules will give debt-ridden cardholders flexibility to repay their debts in accordance with their incomes.
“It is good news [for card holders],” he says. “It opens a new door for debtors who were laid low by the recent financial crisis but were not necessarily bad borrowers by intent.”
However, he declined to say what impact the rule on cash limits for cardholders will have on card issuers, saying “we will have to wait and watch that.”
