Banks told to relax rules for credit cards

Chinese banks have been urged to make it easier for credit card holders to pay their bills and avoid interest charges, as part of an effort to improve lenders' services, experts told the Global Times Tuesday.

Credit card issuers should provide at least three days of grace for card holders, meaning that no interest penalty will fall on customers if they repay a loan within that period after the due date.

Also, customers should be allowed a certain unpaid outstanding amount of a loan, at least 10 yuan ($1.63). Without such a service, card users have to pay interest on a loan in full if they fail to repay the exact amount by the due date.

The two stipulations, which came into effect Monday, are part of a self-discipline pact for Chinese bankers released in February by the China Banking Association (CBA), a non-profit organization under the China Banking Regulatory Commission.

These stipulations apply to all association members, including all banks in the Chinese mainland, according to Wu Hong, vice president of the China Banking Law Society.

"It shows banks are willing to tolerate clients' mistakes caused by neglect - it is understandable that sometimes customers would forget the due day and exact amount," Yu Fenghui, a senior official at Agricultural Bank of China, told the Global Times Tuesday.

Most of China's lenders have already taken such measures, but their standards vary widely.

For instance, most banks set a grace period of three days, but Agricultural Bank of China and China Construction Bank only offer two days.

Some banks' standards have been lower, largely because the CBA's self-discipline requirements are not legally binding, Wu told the Global Times.

"It is possible that some banks may delay or even decline to launch the services," Wu noted.

"It is crucial for regulators to conduct follow-up checks to ensure the implementation," Wu said.