The credit card, which once occupied a &#34;core&#34; role in personal banking, is now facing increasing challenges.
With the popularity of online payments, credit cards are gradually becoming a &#34;idle&#34; existence in the wallets of many individual customers.
As more and more foreigners become accustomed to &#34;Alipay,&#34; and as the domestic credit card usage environment requires policy advocacy and regulatory supervision, credit cards are at a crossroads of either rising up or gradually being &#34;marginalized.&#34;
Has the &#34;golden era&#34; of credit cards really come to an end?
<h2>1. The Long Journey So Far</h2>
Credit cards originated in the United States, where some stores and the food industry began using &#34;credit tokens&#34; as a settlement method in 1915, making it one of the earliest credit card products in the world.
In 1949, Frank McNamara founded the &#34;Diners Club&#34; and issued the first card that could be used to charge at different restaurants, marking the birth of the modern credit card.
In China, the first credit card was issued in 1985 by a branch of one of the four major banks in Zhuhai.
Until 2001, credit cards were mainly &#34;quasi-credit cards,&#34; where cardholders had to deposit money into the card before they could spend.
By 2017, the number of credit cards surged, with an increase of 120 million cards in that year alone, achieving a growth rate of 26.4%. By 2021, the total number of credit cards reached 800 million.
<h2>2. Challenges Everywhere</h2>
Despite the continuous upgrades of credit cards, they have not been able to prevent a slowdown in business growth in recent years.
According to the &#34;2024 Consumer Finance Digital Transformation Research Report&#34; released by UnionPay, as of the end of the second quarter of 2024, the number of active credit cards and credit card loans in China was 749 million, a decrease of 2.73% compared to the end of the previous year. Additionally, since 2022, the growth rates of active credit cards and credit card loans, as well as the outstanding credit balance, have been declining year by year.
The decline in the number of applicable users and usage frequency is the biggest challenge facing credit cards today.
<h2>3. The Era is &#34;Transforming&#34;</h2>
Several important reasons behind this trend can be summarized as changes in the &#34;era.&#34;
First, the rise of mobile payments. The widespread use of smartphones and the rapid development of mobile payment technology have profoundly changed people's payment habits. The latter is not only related to credit cards but also to other debit cards, asset accounts, etc. The positioning of card swiping as the most convenient payment method in many situations is being challenged.
Second, shopping and financial services are rapidly moving online. The latter, along with mobile payments, continuously promotes the emergence of &#34;Huabei,&#34; &#34;Jiebei,&#34; and other major shopping methods, as well as digital credit services, which have partially replaced the offline usage of credit cards.
Finally, the attention to the benefits of credit card usage is declining. With the rise of online consumption, the once highly favored offline credit card customer benefits are also seeing a decrease in attention
The latter's reduction in volume, in turn, affects the investment levels related to institutions, with various credit card benefits continuously lowering standards. As the year-end approaches, multiple institutions, including two state-owned banks, three nationwide joint-stock banks, and two local city commercial banks, have issued announcements regarding adjustments (reductions) to credit card benefits for the following year.
These changes have had a certain impact on the frequency of credit card usage and transaction volume.
<h2>4. Seeking &#34;New Horizons&#34;</h2>
Even with changes in consumption habits, bank credit cards still hold the highest market share in China's consumer finance market.
How to revive the glory of credit cards.
According to data, based on the market share estimates for various entities in 2023, bank credit cards account for 43.9% of China's consumer finance market. The second is self-operated consumer loans from banks (including private banks), which account for approximately 29.5%.
In other words, the credit card market still has enormous development potential and urgently needs to open its &#34;second curve,&#34; transforming pressure into motivation.
In response to the rise of mobile payments, the credit card industry can enhance its competitiveness by improving digital service functionalities. For example, achieving convenient integration of credit cards with smartphones, allowing users to complete payments quickly through QR codes or NFC, can significantly increase the practicality and convenience of credit cards with such a &#34;smooth&#34; payment experience.
Additionally, in the face of the popularity of online shopping and digital credit services, the advantage of credit cards lies in typically having higher payment limits, providing users with flexibility to handle large expenditures. At the same time, credit cards increase user engagement through incentive measures such as reward points and repayment cash redemption, especially in online transaction scenarios like e-commerce, making credit cards the preferred payment tool for many.
Finally, regarding the reduction of credit card benefits, banks can serve segmented customer groups through refined management and digital transformation, while employing brand marketing strategies to enhance the market competitiveness of credit cards. They can launch credit cards related to specific consumption scenarios or collaborate with popular culture and IP. For instance, Agricultural Bank of China launched the &#34;Adventure in Ice and Snow&#34; theme this winter, offering discounts for credit card users on flights, hotels, transportation, and in-store consumption in six cities.
In summary, the credit card business needs to clarify its core competitiveness, achieve precise positioning and innovative development, to closely connect with customers and enhance service intimacy and satisfaction.
Risk Warning and Disclaimer
The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial conditions, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investing based on this is at one's own risk

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Credit cards once occupied a central position in personal banking services, but they now face challenges, with a decline in usage frequency and gradual marginalization. With the popularity of mobile payments, the "golden age" of credit cards may have come to an end. According to UnionPay data, by the end of the second quarter of 2024, the number of active credit cards issued had decreased to 749 million, a decline of 2.73% compared to the end of the previous year

- Credit cards, once central to banking, now face challenges from the rise of mobile payments and changing consumer habits.  
- As of mid-2024, the number of active credit cards in China has declined by 2.73%, reflecting a broader trend of reduced usage and interest in credit card benefits.  
- To revitalize their market position, banks must enhance digital services, leverage credit card advantages for online shopping, and innovate their offerings to meet evolving consumer needs.

Is the "Golden Era" of bank credit cards still around?