Credit cards in China. Part 1

It happened historically that bank cards of payment systems other than UnionPay, issued by banks in mainland China, are credit cards. And if you want to get a bank card of such payment systems as Visa/Mastercard/Amex/Discover/JCB and so on – in addition to a classic UnionPay – you need a credit card.

This is a full-fledged Visa/Mastercard, which can be paid with wherever it is accepted (and this is 90% of terminals around the world). Including on the Internet. You can link it to Yandex.Taxi or Qiwi wallet and pay with it there.

This is also an opportunity to transfer money abroad using SWIFT transfers directly from online banking at extremely attractive rates. Since any VISA card is 双币卡 (dual-currency card), when you open it in online banking, you get a foreign currency account. The absence of such an account is the main obstacle to making such a transfer without a credit card.

This is a (significant) increase in the level of trust from the bank, 芝麻信用 (Sesame Credit) and 微信支付分 (Wechat Pay Points) and all sorts of services.

As you can see, my rating in ICBC for 6 years of ownership did not rise above 3 stars. As soon as I got a credit card, it immediately surged to 5.

 

This is accompanied by various bonus programs – from co-branded cards of airlines and hotel chains to cashback for purchases abroad and free Priority Pass.

Finally, it is an opportunity to borrow some money from the bank before the paycheck.

To receive a credit card, you must meet at least one of the following criteria. Clearly, requirements differ from bank to bank, as well as amounts, but general principles are the same everywhere.

Option 1 – to own banking products in a certain amount. For example, if you have banking products (this includes anything – 理财 (financial management) ， 定期存款 (fixed-term deposit) and so on) in Bank of China in the amount of 50,000 yuan, you can get a Visa Classic credit card. If you have 8 million yuan of such products, then a Visa Infinite card. The overall logic is clear.

Option 2 – to confirm in some way your reliability as a borrower. For instance, in order to issue a Visa Platinum card, Merchants Bank requires real estate with a price of 3 million yuan or with an area of at least 150 square meters.

Option 3 – to prove constant income. With regard to foreigners, in 99% of cases, this is a certificate from work, a certificate of payment of taxes, and so on. This option is extremely unreliable, requires collecting many documents, and the refusal rate (at least for foreigners) is extremely high.

Option 4 – to be a member of the company’s salary project in the bank. This is the option that we will consider in this article. On the example of one of the most foreigners-friendly banks – ICBC. We will follow this criterion. But first, let’s look at other aspects.

What cards are there

First of all, they differ in belonging to some kind of a payment system. There are credit cards that are only Unionpay or Visa (单标识卡), and there are co-badged Visa+Unionpay or Mastercard+UnionPay (双标识卡). Accordingly, the difference is that they can be used only in terminals/ATMs that support this payment system.

Single-currency (单币卡) and dual-currency (双币卡). Differ in account currency.

Magnetic stripe cards (磁条卡), chip cards (芯片卡), and contactless cards (非接触). Due to the difference in chip encryption standards (Unionpay cards utilyze PBOC chips, while Visa/Mastercard use EMV), dual-system Visa+Unionpay cards are issued only with magnetic stripe, whereas chip cards – only separately in the form of two cards.

Finally, they differ in class. In ICBC, for example, there are three levels of credit cards for laobaixing:

普卡 – ordinary cards of Visa Classic level

金卡 – cards of Visa Gold level

白金卡 – cards of Visa Platinum level

Some banks issue cards with even higher levels, such as Visa Signature and Visa Infinite.

And, of course, each credit card has its own benefits and bonus programs.

This is a partial list of all ICBC co-branded credit cards.

 

It can be a bonus program of 海航 airlines, according to which you receive one bonus mile for every yuan spent with the card. It can be a co-branded card with Wehotel platform (which owns 锦江 hotel chain), where you get one bonus for every 20 yuan spent with the card. Finally, the service package of the card may include free commercial insurance, no currency exchange fees and so on – there are hundreds of types of cards and everyone can choose something that suits them best. For example, in my case, the package 宇宙星座信用卡 includes:

1. no service fee
2. 10x 工行积分 points on birthday expenses
3. 容时容差* 
4. no currency exchange fees
5. bank account insurance
6. bonus points when paying via Wechat Pay and JD Pay

*容时容差 – a banking abbreviation for “margin of difference + margin of time”.

*容差服务 – if at the time of debt payment the amount of debt is equal to or less than a certain amount, then it is carried over to the next period without penalties.

*容时服务 – a grace period for debt repayment even after it’s due, during which debt repayment is considered to be on time.

If you do not have a bank deposit or real estate, then you either need to follow these instructions for obtaining a credit card according to the criterion from option 3 or apply to the bank on whose debit card you receive a salary according to option 4, which we are now considering.

ICBC has only one requirement for salary project participants who wish to receive a credit card – to receive a salary of 2,500 yuan per month for at least six months. Just that.

Salary, of course, means getting exactly the salary – that is, from one company (not from a private individual) and on a regular basis.

Required documents:

1. passport with a working residence permit
2. application form

If your ICBC rating is equal to or below 4 stars, then you can apply for a credit card only at a bank branch. If higher – you can also do it online through online or mobile banking.

You will need to indicate the contacts of a friend/colleague/relative, who will be called from the bank and asked for details about you. Naturally, it is advisable to warn this person in advance. Some kind of a surety.

You will need to provide the contacts of your place of work, including a landline phone number. And, of course, notify the secretary/accounting department/management about the call from the bank.

You will need to stay in touch – the credit card department may need to check some details with you or verify information.

I do not advise you to try to deceive the bank by providing false information. Do not expect bank employees to be fools. My friend was asked on the phone “when he came to China and where he works”, the accounting department was asked “where he lives in Beijing”, and I was asked “what is your accountant’s name”.  All this, certainly, at a random time. Well, if an attempt of fraud is revealed, then at best you simply will not receive a credit card, and at worst, you will lose the right to receive it at all, and you will be surprised to find that the bank (or banks) refuses to deal with you.

So, you meet the requirements, you have warned everyone who should be warned – it’s time to start. You go to the bank and say “我要办信用卡”. Sometimes bank employees just do not want to mess with foreigners and say the ritual “办不了” – that’s okay, just keep on insisting – you have the right to apply. Surely, it is better to visit a large central office – there the chances that the staff have already dealt with foreigners are much higher. Better yet, call the hotline and find out which branch of the bank in your city is directly responsible for processing applications for credit cards and apply there. For example, in Beijing, the branch of ICBC that is in charge of credit cards is located at 北京市西城区宣武门西大街丙121号金水大厦. You can find the corresponding branch of your bank on the Internet or by calling the hotline

In case of refusal (and it is unlikely that you will be able to issue a card the first time), the reason for it will be explained to you in detail in the same branch – it is quite possible that the whole trouble was caused by some trifle. For example, I had a refusal due to the fact that the bank could not get through when it phoned my office. After a visit to the branch, I asked them to call again, the status of the application was restored from “rejected” to “under consideration” and two days later the card was approved.

Finally, after about 2-3 weeks you will receive an SMS with congratulations, and in the mobile bank you will see something like this.

Obviously, since this is a credit card, a credit limit is set for it. In my case, the bank considered it appropriate to set my limit to 5,000 yuan per card.

The credit limit is determined according to many criteria that no one knows. Of course, it is safe to say that the higher your salary, the more banking products, the higher your credit limit, but no one will tell you the exact formula. I was given a 5,000 yuan credit limit.

Naturally, it can be increased. The easiest and most obvious way is to actively use the card and avoid delays in repayment. You can buy banking products or invest in 理财. You can buy a car/apartment and provide information about it to the bank – by adding a title and a certificate of ownership of real estate to the bank’s application.

Next time we will talk about the intricacies of usage, debt repayment, credit period, and purchases with a credit card.