Do you remember the previous post about new measures for credit card issuance? As a follow-up post, I am going to tell you about ‘limitation on credit line’.
First, it is necessary to set a reasonable standard of limitation on credit line. A level of disposable income is one of the criteria setting a credit line. Also, the Governor of FSS may request a change, if considering that a standard of credit line violates financial regulations.
Second, there is an enhanced obligation by credit card companies to protect their customers. They are no longer allowed to suggest an increase in credit line to their customers. Also, credit card companies should regularly check their customers’ credit line more than once a year.
Considering both disposable income and credit rating, a credit line should be determined. When setting the line, credit card companies should not allow the line above individual’s financial capability. However, there may be an exceptional approval, in case of an individual emergency. Under such a circumstance, an individual may request a temporary increase in credit line limit. The request can be approved, if the applicant meets certain requirement.
Credit card companies cannot encourage their customers to use credit cards, unless there was a prior consent. Also, terms of conditions and other optional clauses should be displayed in a clear and precise manner, not to confuse customers. The termination procedure for credit card is simplified, as the service is available on the internet and by phone calls
The ultimate ends of all these new measures is to lower the ratio of credit delinquents and build a sound financial system. And, personally, I am so relieved that I will not receive annoying phone calls any more from credit card companies.