3 years, nearly 100 million credit cards canceled! Banks continue to adjust this service

Over the past three years, China’s credit card industry has significantly “shrunk.”

Recently, the People’s Bank of China released the overall operation status of the payment system in the third quarter of 2025, showing that since 2025, the number of credit cards (including credit cards and credit-loan combined cards) has reached 707 million. According to a review by Securities China reporters, the nationwide credit card scale has continued its previous downward trend this year, decreasing by 20 million since the beginning of the year; in the longer term, nearly 100 million credit cards have been reduced over the past three years.

Based on data from several listed banks’ credit card businesses over the past two years, Securities China reporters found that three major trends have continued in 2025: first, the number of issued cards has significantly contracted, with credit card business shifting from scale expansion to quality optimization; second, the growth rate of credit card consumption has markedly slowed, indicating a certain market contraction; third, the asset quality of credit card loans at most large and medium-sized banks has fluctuated noticeably, while banks have accelerated efforts to clear bad credit card assets.

Nearly 100 million credit cards “disappeared” in three years

On December 2, the People’s Bank of China disclosed in the “Overall Operation Status of the Payment System in the Third Quarter of 2025” that by the end of September 2025, the number of credit cards had decreased to 707 million. Comparing with previous data, the number of credit cards has fallen from the historical peak of 807 million at the end of September 2022, declining for 12 consecutive quarters, totaling a reduction of about 100 million cards.

Credit card business is a key part of banks’ retail strategies and an important source of intermediary and interest income. In recent years, with the significant strengthening of regulatory oversight and standardization of bank credit card operations by financial regulators, the number of cards issued, customer base, market share, or market ranking are no longer used as primary or sole performance indicators for banks.

In the past few years, major banks ranked at the top in card issuance have also accelerated the cleanup of “sleeping” credit cards, which is a response to regulatory requirements for dynamic monitoring and management of long-term dormant cards. The regulatory definition of long-term dormant cards points to those with no active transactions for over 18 months, with current overdraft balances and excess payments at zero. After gradually disposing of and clearing these dormant cards, the active card rate has improved to some extent.

According to data from Securities China based on disclosures from several listed banks over the past two years, by the end of the first half of 2025, the credit card issuance volumes at major state-owned banks such as Bank of Communications, Industrial and Commercial Bank of China, China Construction Bank, and Postal Savings Bank declined year-on-year, decreasing by approximately 4.79 million, 4 million, 2 million, and 1 million cards respectively. Conversely, banks like CITIC Bank, Bank of China, Huaxia Bank, and China Merchants Bank experienced counter-trend growth, with CITIC Bank increasing by about 6.37 million cards year-on-year, and Bank of China and Huaxia Bank growing by 2.34 million and 1.8 million respectively.

Senior credit card researcher Dong Zheng believes that the contraction in the credit card market results from a combination of regulatory policies, market competition, changes in user habits, and banks’ strategic adjustments. For example, from a market competition perspective, changes in the payment ecosystem and competitive products have impacted credit cards. Mobile payments have deeply integrated into daily life, relying on payment scenarios that seamlessly embed internet-based credit payment tools, significantly replacing traditional credit cards in small, high-frequency transactions.

63 credit card centers shut down within the year

The accelerated integration and cleanup of credit card businesses are also reflected in the contraction and closure of some commercial banks’ dedicated credit card branches.

According to a review on the Financial Regulatory Administration’s official website, as of the time of reporting, a total of 63 credit card centers at banks such as Bank of Communications, Minsheng Bank, and China Guangfa Bank have ceased operations within the year.

Specifically, Bank of Communications closed the most, with 56 centers, including those in Shanghai, Beijing, Shenzhen, and Guangzhou, which were shut down sequentially within the year. Additionally, Minsheng Bank closed five centers in the year, including the North China, Northeast, Central China, and South China centers, as well as the Deyang center. Guangfa Bank also terminated operations at the Changji and Mudanjiang centers.

In fact, credit card centers established by banks are usually managed directly by the head office, with staffing, marketing activities, and operational costs independent of local branches. These dedicated branches thrived during the rapid expansion phase of credit card business (“land grabbing”). They involved resource investments to develop markets in cities with gaps.

As the credit card market has entered a highly competitive “red ocean” in recent years, coupled with further regulatory tightening, more banks are considering the input-output balance in this field and are choosing to “be more frugal” in managing credit card operations.

In March 2025, during the annual performance briefing, the management of Bank of Communications responded for the first time to the nationwide “wave of branch closures” of credit card centers, emphasizing the core strategy of “accelerating the transformation of credit card operations to local management.”

The bank’s management stated that the previous model of centralized direct management of credit card centers had played a unique role during the rapid growth phase. However, as credit card business enters a new stage, the limitations of this model have become increasingly apparent.

Based on market changes, a relevant person from Bank of Communications said that to better meet customers’ integrated financial service needs and adapt to the new development stage of credit card business, the bank has reformed its operational model—from centralized direct management to local branch management, providing one-stop, comprehensive financial services to local customers, integrating credit card operations into local retail business.

Closing credit card centers does not mean service withdrawal but rather a shift in operational focus. According to banking industry insiders, after some joint-stock banks transfer their credit card customers to local branches, they can continue to provide services through an integrated “online + offline” model, embedding credit card services into wealth management and consumer loan scenarios to enhance customer loyalty.

Retail assets like credit card loans face pressure

Besides the sluggish growth in card volume, another major trend in the year is the continued decline in total transaction amounts from credit card consumption, with some banks even seeing year-on-year decreases in outstanding credit card loan balances.

Looking at the total consumption amount in the first half of 2025, data from five comparable listed banks shows a year-on-year decline. Specifically, China Merchants Bank’s credit card consumption was 2.02 trillion yuan, down about 188.8 billion yuan from the same period in 2024. Similarly, the relevant indicators for China Everbright Bank, CITIC Bank, Industrial Bank, and Huaxia Bank decreased by 169.3 billion, 155.7 billion, 111 billion, and 70 billion yuan respectively.

Another indicator is the overdraft (loan) balance on credit cards. Comparing the top 10 listed banks by credit card overdraft balance, in the first half of 2025, most state-owned banks like Agricultural Bank of China and ICBC saw increases, but many joint-stock banks experienced year-on-year declines. For example, Ping An Bank, CITIC Bank, Minsheng Bank, and Everbright Bank saw decreases of approximately 76.1 billion, 45.6 billion, 25.1 billion, and 15.4 billion yuan respectively.

A report released by consulting firm Deloitte in September states that in the first half of 2025, credit card consumption continued to decline, affected by macroeconomic conditions and consumer confidence. The decline in total credit card consumption reflects weakened resident demand and increased precautionary savings. Overall, the credit card consumption market is shrinking, and banks are facing challenges with decreasing transaction volumes.

Additionally, Securities China reporters found that many leading state-owned and joint-stock banks saw their non-performing credit card ratios rise year-on-year in the first half of 2025, indicating some impact on asset quality.

Specifically, the non-performing rates at ICBC, Minsheng Bank, and Industrial Bank have already exceeded 3%, with Bank of Communications approaching that level. ICBC’s non-performing rate increased by 0.72 percentage points to 3.75%, Bank of Communications rose by 0.65 points to 2.97%, and China Construction Bank and Minsheng Bank increased by 0.49 and 0.44 points to 2.35% and 3.68%, respectively. Meanwhile, banks like Industrial Bank and Ping An Bank have seen notable reductions in their non-performing rates, decreasing by 0.6 and 0.4 percentage points respectively.

The Wang Jian team at Guoxin Securities also pointed out in a research report in November that retail loan risks are currently surfacing, with no clear peak yet. Personal housing loans, consumer loans, and credit card loans are all showing signs of risk exposure. Over recent years, the non-performing rate of credit card loans has been rising, but the growth rate has slowed.

(End of translation)