China's central bank has abolished late fees for credit cards in China but set upper and lower limits on maxing out credit card limits.

Now when you overspend your credit card, rather than paying a once-off late fee, you will be charged penalty rates. The rate on the upper limit of being overspent is five basis points of the daily rate. The rate on the lower limit of overspending is 70 percent of the previous rate. The change comes as part of China's move towards interest rate liberalisation.

Meanwhile, the daily cash-withdrawal limit per card has been increased to 10 thousand yuan from two thousand. The change is seen as a measure to boost domestic spending and upgrade credit card services. 

The Chinese central bank will also toughen its supervision of credit card rates charged by individual banks. Banks are required to report to the central bank on a monthly basis regarding changes in penalty rates, interest free repayment periods, and its lowest repayment amounts.