Citigroup becomes first global bank to flood China with credit cards

Nigeria Sun (ANI) Tuesday 7th February, 2012

Citigroup (c) is set to become the first global bank to issue its own credit cards in China.

The financial giant said that Chinese banking regulators have given the company the go-ahead to begin issuing credit cards in the country, the CBS News reports.

Although credit cards are fairly new to China, the market is growing fast with some 268 million credit cards being in use in China.

Several factors are driving the growing use of credit cards in China. The country has a burgeoning middle class, especially in the large coastal cities that dominate trade on the mainland.

Some six percent of all commercial transactions in China were conducted using a credit card, that reflects the significant obstacles that could slow the adoption of credit cards in China and impede Western banks.

"There is a great reluctance to go into debt and to then pay interest on that debt, which of course is a defining feature of credit card products," [the] study's co-author Steve Worthington of China and Australia's Monash University said.

But credit card-based transactions in China amounted to 1.6 trillion dollars, according to the Financial Times.

Growing credit-card use in China could have repercussions for the broader global economy.

It could boost domestic consumption, which has for long been the Western governments' aim for increasing exports to China. (ANI)