As 2024 comes to an end, major banks in Taiwan have gradually begun to implement "card clearance policies"! Starting from 2024, the banks that have announced that they will clean up "inactive cards" include: Taipei Fubon Commercial Bank, CTBC Bank, Taishin International Bank, E.SUN Commercial Bank, DBS Bank, Mega International Commercial Bank, First Commercial Bank, KGI Bank, Standard Chartered Bank, Chang Hwa Commercial Bank, Hua Nan Commercial Bank, Cathay Bank, Bank SinoPac and Far Eastern International Bank.
However, the card suspension regulations vary slightly from bank to bank, so please follow the announcements of each bank.
Cathay United Bank and Sunny Commercial Bank announced in November that starting from January 1, 2025, those who have "not opened a card or made any purchases" for more than one year after the card was approved, and who are assessed to have risk and security concerns, will take measures to Relevant measures such as lowering the credit limit and suspending the card.
So, why do banks successively announce card clearance policies? What are the benefits of clearing bank cards? The following is an inventory starting with the "active card rate" one by one.
The credit card activation rate in Taiwan is approximately 65.6%
As of August this year, which bank has the highest card activity rate? Hua Nan Commercial Bank's 78.7%, Taipei Fubon Commercial Bank's 77.9%, and Taishin International Bank's 72.2% respectively ranked in the Top 3, with active card rates above 70%.
The subsequent rankings are 69.6% for Far Eastern International Bank, 66.5% for American Express Taiwan, 66.45% for Union Bank of Taiwan, 66% for HSBC Bank (Taiwan), 65.7% for E.SUN Commercial Bank, 65.4% for Cathay United Bank and 65.1% of COTA Commercial Bank.
In total, Taiwan's 32 card-issuing banks have a total of 58.69 million cards, but the number of valid cards with consumption records in the past six months is only 38.53 million, which translates into an average card activity rate of only 65.6%.
The active card rate is the ratio of active credit cards divided by the ratio of circulating cards. From a bank's internal analysis, it can show the customer's preference for their own credit cards. Some banks will also clear out inactive cards and control the active card rate at a certain level.
"No payment for more than 1 year" means the card is inactive and the goal is to clear the card
If banks want to increase their card activity rate, the most direct way is to find ways to reduce the gap between the "number of cards in circulation" and the "number of valid cards." Therefore, the "card clearance policy" has become a necessary measure.
Where does the "Card Clearance Policy" begin? In fact, since the end of 2023, major banks have successively announced that they will implement "card clearance policies" starting from 2024, mainly targeting dead cards that have "not been used for too long", that is, the cards have not been swiped or opened for 12 consecutive months after being approved. , if the time specified by the bank is exceeded, the card will be "stopped" or "rights frozen".
In addition to the eight major banks that announced a "card clearance policy" last year, Cathay Bank, which issued 7.38 million cards (number of cards in circulation) as of August this year, has also joined the ranks, according to data from the Financial Supervisory Commission.
According to Cathay Bank's announcement on October 23, it will update the credit card terms starting from New Year's Day, 2025. "The cardholder's right to use the credit card may be temporarily suspended if the cardholder has not opened the card or made any purchases for more than one year (inclusive) after the card was approved. , terminate the credit card contract directly, or force the card to be suspended."
Bank SinoPac, which has 2.19 million cards in circulation, also introduced a card clearance policy. Its latest announcement pointed out that based on the risk or security considerations of cardholders holding credit cards, if the cardholder does not open the card after approval or has no consumption transactions for more than 12 months (inclusive), the bank may reduce the credit limit or For card suspension, the relevant notice will be adjusted from 30 days in advance to 60 days in advance, which will also take effect on January 1 next year.
In addition to increasing the card activity rate, there are two reasons why banks clear cards
Reason 1: "Inactive cards" can easily increase the risk of fraud
When the number of "inactive cards" increases, and even exceeds the number of "active cards", there will be a risk of fraudulent use. For example, CTBC Bank said that in response to the recent frequent fraud cases and concerns that customers' cards that have not been used for a long time may be lost and used by malicious people, it has added provisions related to card suspension in the terms of the agreement.
Another bank executive also revealed that the purpose of revising credit card rights this time is to prevent fraud, and further reminded users to sort out credit cards they seldom use. If people really don't want to use their cards, they should take the initiative to cut their cards.
Reason 2: Reduce operation and maintenance costs
On the other hand, banks also need to consider "operation and maintenance costs." That is, in addition to preventing fraud cases, they also need to detect abnormal card swiping situations to prevent blockage, as well as account management, data processing and other services, resulting in skewed operating costs. high. Therefore, banks can save a lot of costs by speeding up the cleanup of inactive cards.
