Many young people in Shanghai spend more than they earn and
depend on parents to pay their bills.
A Shanghai district court found that 80 percent of the young
people who are sued for not paying credit card bills depend on
their parents for help.
An office worker surnamed Xia was sued early this year by three
banks.
She had three credit cards and withdrew from one to pay the
arrears of another. She soon found herself unable to pay her debts
after quitting her job.
Her parents came to know of her situation, and went to the
Shanghai Huangpu District People's Court to pay her debts.
A judge said many parents who are not wealthy are forced to pay
the debts of their adult children.
A 23-year-old man surnamed Huang applied for a credit card soon
after he graduated from school and found a job. He racked up a debt
of 5,000 yuan (US$658) in a month. When he was sued for failing to
pay, he turned to his parents, both factory workers, for help.
The judge warned that young people should pay more attention to
how they spend their money, and banks should tighten rules in the
issuance of credit cards.
He said some banks are issuing credit cards to people knowing
they are not financially secure.
When China Construction Bank started to issue credit cards to
university students two years ago, it required applicants to
present an identity card as well as a student card.
Now, all some banks require is an ID card number rather than the
actual card.
The Shanghai High People's Court has started to compile a
blacklist of defaulters. The list will be distributed to
credit-search companies.
People who wish to buy property, secure loans or even apply for
a job can be investigated for credit-worthiness.
Some banks have also started to compile blacklists.
(China Daily August 15, 2007)