It seems credit cards are losing their credibility, as becomes increasingly easy to apply for one. The loose application procedure is driving up bad loans at banks.

It only takes several signatures to apply for a credit card.

Mr. Li, who is a credit card applicant, said, "When filling in the personal information form, the agent told me to put my income at about 40-thousand yuan a year, and my education background at college level."

In fact, Mr. Li earns less than one-thousand yuan a month. But the "agent" has successfully helped him get more than ten credit cards.

But the credit cards are bringing only short-term happiness. Now, Mr. Li has a 60-thousand-yuan-credit card debt. It will be extremely hard for him to pay back the money.

Banks are victims, too. The rate of bad loans at credit card centers in Shanghai stood at 2.42 percent by the end of last year. This has raised alarm.

Professor Zhang Jun, from Fudan University, said, "We have to establish a strict and effective supervision system. We should do that in advance, in order to avoid crisis experienced by South Korea, and Japan in the early days. We should be aware that it is the credit crisis in the US that triggered the current financial turmoil."

But the banks have themselves to blame. To pursue the good revenue returns from credit cards, banks are pushing the market to the limit. They give business to agents, and allow them to earn a certain percentage of money from the revenue. It leaves room for various kinds of document fraud and information theft.

And it is the banks themselves suffering the consequences.

Professor Zhang Jun said, "Excessive consumption would lead to overdraft exceeding, and would finally turn out to be a heavy burden for banks."

If credit card owners cannot pay their debt, a crisis may not be far away. The United States has just sounded the warning.

(CCTV March 27, 2009)