College students, once a major demographic for banks issuing credit cards in China, are now finding that many lenders such as China Merchants Bank and Bank of Communications have recently steepend their application requirements or stopped issuing credit cards to students altogether.
The changes in policy originate with a notice issued by the China Banking Regulatory Commission at the end of July. According to the notice, other than parents authorizing access their account, banks are not allowed to issue credit cards to those under 18. For students over 18 unemployed or without income, a cosigner is required.
Paying with plastic is really common on campuses, and is not unusual for a student in China to have up to 3 to 4 credit cards.
"Whenever I go back home, I use a credit card to buy plane tickets, because at the end of the semester I'm usually short on cash," said Sun Chenghao, a senior student at the China Foreign Affairs University.
But such convenience also has its drawbacks. Of all recent credit card debt cases heard at the People's Court in Beijing's Xuanwu District this July, about 25 percent involved college students.
"Paying with a card makes me feel like I'm getting something for free," Feng Liwen, a senior at Zhengzhou University of Light Industry, said.
It's not easy for young people to resist the instant gratification credit cards offer, making them a serious threat to college students' credit records, most of whom still rely on financial support from their families.
Students sometimes use multiple credit cards to juggle their debt, but commonly the burden falls on the shoulders of parents, who are often unaware of their child's spending habits.
"Credit cards free children from supervision and enable impulse buying, which can turn into financial pressure both for children and parents," Liu, whose son is a junior, said.
Liu also expressed support for the new credit card policies, and even suggested that banks refuse to issue them to students altogether.
As for those students who have grown accustomed to life with credit, while some have their complaints, most are understanding of the new policy.
"It is a little inconvenient, but for students like me who don't have an income and lack self-control, it's probably not a bad idea," said Liu Yu, a student of Shanghai Jiaotong University.
Zhao Xijun, a professor at Renmin University of China's School of Finance, offered a different perspective.
"It's better to teach students how to manage their finances when they actually have their own credit cards rather than deny them one," Zhao said.