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Whether Customers May Use Their Credit Cards to Make Payments of Principal and/or Interest on Loans
(23 August 2004)
Letter Ref. Jin-Kuan-Yin-(IV)-0934000635
Subject:
Whether customers may use their credit cards to make payments of principal and/or interest on loans. Please be advised and inform all member institutions to comply with the matters set out in the "Statement."
Statement:
1. This is in response to the letter dated 23 June 2004 (ref. Jhu-Shang-Yin-Ka-Sian-09306740) sent by the Hsinchu International Bank to the Bureau of Monetary Affairs, Ministry of Finance. Because the Bureau of Monetary Affairs was transferred to the jurisdiction of the Financial Supervisory Commission on 1 July of this year (2004), the present letter is issued in the name of the Financial Supervisory Commission.
2. A credit card, by nature, is a consumer payment tool. Using it to make payments of loan principal and/or interest is for debt repayment rather than for consumer spending purposes. This is inconsistent with the nature of credit cards, and is likely to excessively expand the function of credit cards. Using credit cards to make payments of bank loan principal and/or interest would shift risk from lending business to credit card business, and detract from lending banks' grasp on the repayment status of loan customers and risk control/management. Therefore, customers may not use credit cards to make payments of loan principal and/or interest. |