In a nation of savers like China, cash is still king, but plastic is gaining popularity.

From January to March 2010, Chinese banks extended credit card loans of 1.48 trillion yuan ($216.8 billion), an increase of 42.9 percent over one year ago, according to a recent report of the People's Bank of China, the central bank.

Chinese consumers are increasingly paying for an expanding array of goods and services with money they don't have. Card users feel comfortable spending more, and would not perceive consumption as affecting their bank balance. This is good news for policymakers who are pinning hopes on the consumer market to thrive and fill in the blanks left by an export downturn.

However, the credit card boom was not without risks as many cardholders are falling behind their monthly obligations. The credit card debt that was overdue for at least six months was 8.8 billion yuan ($1.3 billion) by the end of March 2010, said the report.

Many profit-hungry issuers recklessly put their credit cards into the wallets of low-income consumers, sowing the seeds of bad debt, said Guo Tianyong, Director of the Research Center of Chinese Banking Industry under the Central University of Finance and Economics.

The regulators have been well aware of the problem and are stepping up tight control over blind card issuance, he said.