3 Years, Nearly 100 Million Credit Cards Canceled! Banks Continue Adjusting This Business

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 Q3 2025, showing that since 2025, the number of credit cards (including credit and debit cards combined) has reached 707 million. According to a review by Securities China reporters, the nationwide credit card volume has continued its previous downward trend this year, decreasing by 20 million from the beginning of the year; over a longer period, nearly 100 million credit cards have been reduced in the past three years.

Based on data from several listed banks’ credit card businesses this year, three main trends continue: first, the number of issued cards has sharply contracted, with credit card business shifting from scale expansion to quality optimization; second, the growth rate of credit card consumption has significantly slowed, indicating a market contraction; third, the asset quality of credit card loans at most large and medium-sized banks has fluctuated notably, while efforts to clear bad debt burdens have accelerated.

Nearly 100 million credit cards “disappeared” in three years

On December 2, the People’s Bank of China disclosed in the “Overall Operation of the Payment System in Q3 2025” that by the end of September 2025, the number of credit cards had decreased to 707 million. Compared with previous data, the number of credit cards has declined for 12 consecutive quarters from the peak of 807 million at the end of September 2022, 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, financial regulators have significantly strengthened supervision and regulation of bank credit card operations, so the number of cards issued, customer base, market share, or market ranking are no longer primary or sole performance indicators for banks.

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

According to a review of data from some listed banks over the past two years, as of the end of the first half of 2025, state-owned banks such as Bank of Communications, Industrial and Commercial Bank of China, China Construction Bank, and Postal Savings Bank saw their credit card issuance decrease year-on-year, with reductions of 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 countercyclical growth, with CITIC Bank increasing 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 competitive perspective, the evolution of the payment ecosystem and competition from alternative products have impacted credit cards. Mobile payments have deeply integrated into daily life, leveraging payment scenarios to seamlessly embed internet-based credit payment tools, significantly replacing traditional credit cards in small, high-frequency transactions.

63 credit card centers shut down this 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 data from 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 this 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. Minsheng Bank also closed five centers, including the North China, Northeast, Central China, and South China centers, as well as the Deyang center. Guangfa Bank terminated operations at the Changji and Mudanjiang centers.

In fact, these credit card centers are usually managed directly by the head office, with costs for staffing, marketing, and operations independent of local branches. Such dedicated branches flourished during the rapid expansion phase of credit card business (“land grabbing”), investing resources to develop markets in cities with gaps.

As the credit card market has entered a highly competitive “red ocean” in recent years, coupled with increased regulatory scrutiny, more banks are considering the return on investment and choosing to “manage carefully” and optimize credit card operations.

In March 2025, during the annual performance briefing, the management of Bank of Communications first responded to the nationwide “wave of mergers and 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 the business has entered a new stage, the limitations of this model have become increasingly apparent.

In response to market changes, Bank of Communications officials said that to better meet customer needs for integrated financial services and to adapt to the new development stage of credit card business, the bank has reformed its operational model—from centralized management to local branch management—providing one-stop, comprehensive financial services to local customers and integrating credit card operations into retail business at the local level.

Closing credit card centers does not mean service withdrawal but rather a strategic shift. Industry insiders previously told Securities China that after transferring customers from the original centers to local branches, banks can continue to provide services through a combination of online and offline channels, embedding credit card services into wealth management, consumer loans, and other scenarios to enhance customer loyalty.

Retail assets like credit card loans under pressure

Besides the sluggish growth in card volume, another major trend this 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 show 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, Everbright Bank, CITIC Bank, Industrial Bank, and Huaxia Bank saw decreases of 169.3 billion, 155.7 billion, 111.0 billion, and 70.0 billion yuan respectively.

Another indicator is the overdraft (loan) balance on credit cards. Comparing the top 10 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 declines. For example, Ping An Bank, CITIC Bank, Minsheng Bank, and Everbright Bank saw year-on-year decreases of approximately 76.1 billion, 45.6 billion, 25.1 billion, and 15.4 billion yuan respectively.

A report by consulting firm Deloitte published in September states that in the first half of 2025, credit card consumption continued to decline, affected by macroeconomic conditions and consumer confidence. The total credit card consumption at some banks decreased, reflecting weakened resident consumption demand and increased precautionary savings. Overall, the credit card market is shrinking, and banks face challenges with declining consumption.

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

Specifically, the non-performing rate at banks like ICBC, Minsheng Bank, and Industrial Bank has 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 percentage points to 2.97%, and China Construction Bank and Minsheng Bank increased by 0.49 and 0.44 percentage 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.

The Wang Jian team at Guoxin Securities also pointed out in a November report that retail loan risks are now 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 rate of increase is slowing.

(Edited by: Wang Zhiqiang HF013)

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