"Card slaves" forced to stop using cards in January

This article was published by the Taiwan Headlines on March 16, 2006. It reports that the number of credit cardholders who were unable to pay their large debts and who were therefore forced to stop using their cards amounted to 400,000 in January 2006. According to statistics released by the Banking Bureau under the Financial Supervisory Commission, the number of credit cards discharged by banks in Taiwan totalled 715,000 in January 2006.

About 60 percent of these were barred by banks from further charges. This means that only 40 percent of these cardholders asked the banks to close their credit card accounts in January 2006, because they were inundated by too many cards and reluctant to pay annual fees.

The number of credit-card "slaves" who failed to repay their loans jumped from 400,000 to 700,000 in January 2006, which led to a dramatic increase in the number of discharged cards. Although the number of circulated credit cards is already in decline, unpaid credit card accounts still totalled as high as NT$7.42 billion (US$231.8 million) in January 2006 alone, forcing various banks to bar further purchases for some consumers.

Over the past six months, the Consumers' Foundation received more than 10,000 complaints from consumers that were barred from further purchases. They argued that the banks should have notified their clients first, before stopping them from using credit cards because they have failed to repay loans.