Cutting Card Interest Rate May Drive Issuers to Up Annual Fee

2009/04/22 | By Judy Li

Taipei, April 22, 2009 (CENS)--Taiwan's Legislature is proposing to lower the ceiling on interest rates of both credit and cash cards in Taiwan. If the proposal passes the third reading, some card issuers may raise the annual fee for such cards.

Citibank, the largest foreign card issuer in Taiwan, is said to raise its annual platinum credit-card fee to NT$8,000 (US$242.42 at US$1 = NT$33) from the current NT$2,400 (US$72.73). Some domestic card issuers, including Taishin International Bank, Taipei Fubon Commercial Bank and Chinatrust Commercial Bank, are reportedly to follow suit.

Citibank said that, with official approval to lower the ceiling on the said interest rates to 12.5% per annum from the existing 20%, it would increase the annual fee for cardholders to offset the possible losses in revenue.

Taishin International Bank, a domestic card issuer, is expected to see an increase of 50,000-60,000 credit cards by the end of this year, and it may raise the spending limit to NT$100,000 (US$3,0 to NT$130) a year to avail cardholders of free membership privilege.

Annual Fees for Platinum Cardholders in Taiwan
Issuer	Annual fee	Conditions for fee exemption
Chinatrust Commercial Bank	NT$1,500 for each main cardholder and NT$750 for each supplementary cardholder	Per-card annual spending over NT$12,000
Taipei Fubon Commercial Bank	NT$3,000 for each main cardholder and NT$1,200 for each supplementary cardholder	Annual spending over NT$12,000 or 12 transactions a year per-card
Cathay United Bank	NT$1,800 for each main cardholder and free for supplementary	Over two transactions a year per-card
Taishin	NT$1,500 for each main cardholder and NT$750 for each supplementary cardholder	Over NT$12,000 in annual spending per main card and NT$6,000 per supplementary card
Citibank	NT$2,400 for each main cardholder	Annual spending over NT$60,000 or 12 transactions a year per-card
Union Bank of Taiwan	NT$5,000 for each main cardholder and NT$2,500 for each supplementary cardholder	Annual spending over NT$10,000 or over 10 transactions a year per-card. (Annual fee of NT$500 per-card with annual spending NT$5,000 to NT$10,000 or five transactions a year; annual fee of NT$1,000 per-card with spending of less than NT$5,000 or five transactions.)

Source: the said banks