With banking institutions tightening credit-issuing criteria in the face of the increasing number of bad loans, Taiwan’s credit-card market is experiencing slow growth although the retail sales volume continued to rise in the past couple of months, Visa International said.

Retail sales volumes on its branded credit cards in September and October both showed double-digit growth from a year ago, said Marco Ma, Visa’s manager in Taiwan.

But the attrition rate has been escalating. The Financial Supervisory Commission’s latest figures showed that 561,424 new cards were issued by 50 banks in October, but 601,955 cards were canceled.

This has led to a shocking attrition rate of 107 percent, up from 52.5 percent compared with the same period last year when 1.16 million cards were issued in a single month.

From the fourth quarter, banking institutions have been aware of the rising unsecured-loan risk and taken the initiative to tighten lending and adopt higher standards when granting new cards, said Renee Yang, an analyst at Yuanta Core Pacific Securities Corp.

Ma stressed that although the number of cards in circulation might fluctuate, whether the retail sales volume is rising holds the key to making a profit.

During the first 10 months of the year, Visa-brand platinum cards in circulation surged to over 6.8 million, a jump of 37 percent from a year ago. These cardholders’ card-sales volume, including cash advances, during the same period amounted to US$10.4 billion, contributing to 46 percent of its payment cards.

Jackie Lin, TaipeiTimes