China's Banking Association is asking banks in the Chinese mainland to offer more flexible services to card holders. A new agreement about delayed payments and penalty fees goes into effect later this month.

From July 1, the association will advocate a new policy for banks in the mainland. If, for example, your credit card bill is due at the end of the month, you would now have three extra days to pay without incurring a penalty fee, so your outstanding balance is no more than ten yuan. At the moment you would have been charged interest on the total outstanding bill.

In the past the banks would have charged interest on the amount of the entire month's bill, not just on the outstanding amount. Two of China's largest banks are not cooperating with the new policy.

"Since we have the country's longest repayment period, 56 days, we actually allow two days grace period. But if you only owe 10 yuan, we won't charge interest," a customer service representative at the Agricultural Bank of China said.

Banking analysts say the agreement does not have the force of law, and banks may adjust the number of repayment postpone days and the penalty amount as they like. They suggest customers ask for details before applying for a new credit card.