Discount stacking with financial subsidies reduces the cost of bank credit card bill installment plans

Staff Reporter Peng Yan

In January of this year, the Ministry of Finance and two other departments optimized the implementation of the personal consumer loan financial subsidy policy. With policy support, many banks increased their credit card installment discounts, combining financial subsidies with bank promotions to bring double benefits to consumers.

Xue Hongyan, a special researcher at Su Commercial Bank, told Securities Daily that this policy for the first time included credit card bill installments in the scope of subsidies, with an annual subsidy rate of 1 percentage point. It also extended the duration, increased the subsidy cap, and expanded the number of processing institutions, directly reducing banks’ funding costs and creating room for discounts. Additionally, banks increasing their promotional efforts is a proactive response to stimulate consumption and seize the peak shopping season, which helps expand retail customers, improve the penetration rate of installment services, and better serve lower-tier markets and niche consumption scenarios.

Subsidies and Discounts Work Together

On January 20, this year, the Ministry of Finance, the People’s Bank of China, and the China Banking and Insurance Regulatory Commission jointly issued a notice on optimizing the implementation of the personal consumer loan financial subsidy policy, extending the policy period to the end of 2026. After the new policy was announced, many banks responded quickly, releasing detailed operational guidelines and Q&A instructions, including credit card installment services within the scope of subsidies to ensure rapid policy implementation.

At the same time, many banks lowered installment handling fees, launched installment rate discounts, limited-time fee waivers, and other activities, further easing consumers’ repayment pressure through the combined effect of financial subsidies.

For example, Bank of China launched the “Enjoy Big Discounts on Installments, Additional Subsidies” campaign. Cardholders of domestic personal credit cards (excluding corporate and corporate cards) can enjoy discounts when applying for bill installments, flexible installments, or consumption installments through official channels, subject to system review. Customers meeting the subsidy requirements and whose installment interest is recorded within the policy period can also enjoy an additional 1 percentage point annual subsidy.

Nanjing Bank, from January 1 to June 30, offered limited-time discounts to normal primary cardholders (excluding special installment cards like Xin Installment and Xin Easy Installment). For bills of 12 months or more, customers could enjoy a special 30% installment rate, reducing the original annualized rate of about 14% to around 4.4%–4.57%. Additionally, customers who apply for credit card bill installments and whose funds usage complies with relevant policies, after bank verification, can also enjoy the financial subsidy.

Guilin Bank also launched the “Surprise Installments, Rates Starting at 30%” activity. From February 1 to February 28, invited users could apply for one-click installments via mobile banking, Meituan app, or SMS, with the lowest single-term rate at 30%. Installments of at least 300 yuan supported flexible options from 3 to 24 months.

Under the combined benefits of bank installment discounts and financial subsidies, some credit card installment rates have dropped as low as 2%, effectively reducing residents’ consumption costs. The reporter learned that many consumers have shared their installment bills on social media. One consumer shared that they paid off nearly 130,000 yuan in 12 installments, with the first installment interest at 177.52 yuan. After adding the financial subsidy, the interest for each installment was reduced by 57.9 yuan. “The original annual interest rate was 3.06%, and with the 1% subsidy, the effective annual rate drops to over 2%, which is really cost-effective,” the consumer said. Another consumer shared similar experiences.

Enhancing Residents’ Consumption Capacity

According to Xue Hongyan, the combined effect of the financial subsidy policy and bank discounts strongly stimulates residents’ consumption from three dimensions: cost, scenarios, and confidence. On one hand, the subsidy policy and bank installment discounts and fee reductions form double benefits, directly lowering the actual cost for residents. On the other hand, the policy removes restrictions in the consumption field, covering large-scale purchases to daily retail, and paired with bank-specific discounts, it can precisely match residents’ needs, effectively boosting immediate consumption willingness. The decline in consumption costs accelerates the conversion of willingness into actual actions, improving residents’ consumption capacity and promoting offline merchant traffic and sales growth.

Xue Hongyan further stated that, from a market perspective, this policy effectively stimulates the issuance of consumer credit, injecting momentum into expanding domestic demand. After the policy was implemented, consumer credit business grew rapidly, with many banks seeing significant increases in related customer numbers, transaction counts, and lending scale, achieving a healthy linkage between credit and consumption.

Lou Feipeng, a researcher at China Postal Savings Bank, told Securities Daily that the policy has driven consumer credit issuance and helped expand domestic demand.

Xue Hongyan reminded that during policy implementation, banks should focus on ensuring the compliance of fund usage, managing credit risks, protecting consumer rights, and standardizing subsidy procedures. They should establish robust transaction review mechanisms to prevent illegal fund use; adhere to prudent credit granting to avoid overdue risks; clearly communicate policy details to prevent false advertising and illegal charges; and standardize subsidy processes to ensure compliant and controlled policy execution.