The young and the cautious

University students make an ideal sample for a credit card study because they represent a section of the population who are quite different from their parents' and grandparents' generations in terms of their consumption behavior.

They are, in short, more likely to hold a credit card.

We canvassed the views of more than 150 students, screening them first to ensure that they were credit card holders. The majority of the students sampled received a generous allowance from their parents, which meant there wasn't a financial constraint on potential credit card usage.

In the case of undergraduates, the average annual allowance of 20,000 yuan (2,170 euros) is almost twice as high as the average annual income of a Chinese worker. Postgraduates typically receive about 45,000 yuan a year.

Most undergraduates, 71 percent, held a single credit card, while 75 percent of postgraduates owned more than one card and as many as three.

However, holding multiple credit cards did not result in greater usage. More than half of the students used their cards only once a month, with nearly one-third only using their credit cards once or twice a year.

The main reason given for the limited usage was the lack of a payment terminal infrastructure, even in modern second-tier cities such as Ningbo.

One student said: "Unfortunately, we cannot use our cards wherever we want. Small shops don't have payment terminals so we cannot use them as often as we would like."

The second most common reason for not using a credit card was the terms of the payment method.

Another explained her card was issued in her hometown. "When I want to pay it back I need to go there to give the money to the bank. I cannot do it here so I don't think it is convenient."

Clearly the banks and the authorities need to get together to find more ways to accept credit cards and re-think the awkward repayment method. Currently, it's not easy to use and manage a credit card in China, even if you wanted to shop until you drop.

There is another obstacle in the way of the credit card market developing, and it is potentially much harder to resolve because it involves deep-seated attitudes toward money.

Young, affluent consumers are very astute about the risks involved in using credit cards. And they are very aware of the costs associated with borrowing money.

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