21st Century Business Herald reporters Zhang Xin and Guo Congcong
China's credit card market is undergoing profound adjustments.
Recently, the People's Bank of China released data from the &#34;2025 Payment System Operation Overall Situation&#34; report, showing that the national credit card issuance volume has dropped to 696 million cards, declining for three consecutive years and officially falling below the 700 million mark, reaching a nearly seven-year low.
At the same time, credit card benefits are significantly shrinking: the points redemption ratio has been lowered, and the frequency of value-added services such as airport lounges, free health check-ups, and roadside assistance has been reduced or even canceled, covering almost all categories of benefits.
Various signs indicate that credit cards are gradually bidding farewell to the &#34;three highs era&#34; of high issuance, high benefits, and high limits.
Under the industry adjustment, there are real choices made by consumers: some hold a dozen cards, with their first &#34;million&#34; milestone coming from the accumulated credit limit of the cards, but are now considering keeping only two; some keep one credit card, shifting their daily consumption focus to internet credit loan products; some have damaged their credit due to forgetting repayments and decide to return to a &#34;spend what you have&#34; consumption method...
However, several industry insiders told reporters from the 21st Century Business Herald that the notion of &#34;credit cards losing favor&#34; is not accurate. In fact, what is fading is the physical credit card, while credit consumption itself is still deeply integrated into daily transactions in digital form. For future development, industry insiders suggest that credit card businesses should shift from pursuing growth to deepening existing customer relationships.
At this turning point in the industry transformation, banks and industry insiders are pondering a more fundamental question: As users' payment choices become increasingly diverse, what unique position can credit cards occupy in users' wallets and smartphones?
The turning point for the credit card industry was actually planted four years ago.
Looking back at the data from the past four years, the credit card issuance volume has gradually decreased from 798 million cards at the end of 2022 to 767 million cards at the end of 2023, and further down to 727 million cards at the end of 2024, with a further drop to 696 million cards by the end of 2025. In just three to four years, more than 100 million cards have been reduced, equivalent to one in every seven credit cards being dormant or canceled.
Table 1
With the contraction in issuance volume, the consolidation of credit card business channels among banks is also advancing, and cost reduction and efficiency improvement have become the industry's consensus. According to media reports based on information from the National Financial Supervision and Administration, by 2025, a total of 66 credit card sub-centers, including those of Bank of Communications, China Minsheng Bank, and Guangfa Bank, have ceased operations, with Bank of Communications having the highest number of closures at 58; in January 2026, Guangzhou Bank also terminated operations at its seven credit card sub-centers.
The trend of online channel integration is also becoming increasingly evident. Against the backdrop of an overall contraction in credit card business scale and the general push for cost reduction and efficiency improvement in the banking industry, the independent credit card apps, which were once important operational platforms, are facing a reassessment of their cost-effectiveness.
Since 2024, several banks, including Shanghai Rural Commercial Bank, Beijing Rural Commercial Bank, and Bohai Bank, have announced that they will migrate credit card-related functions and services to their mobile banking apps and shut down their original independent credit card applications. This adjustment has also begun among state-owned banks: in September 2025, Bank of China announced that it would gradually migrate and integrate the functions of its credit card exclusive app &#34;Colorful Life&#34; into the &#34;Bank of China&#34; app, becoming the first state-owned bank to shut down an independent credit card app
Subsequently, Postal Savings Bank also shut down its credit card app in December 2025.
Behind these numbers is a collective turnaround in the industry.
Dong Zheng, a senior credit card industry researcher, pointed out to our reporter that the current credit card issuance volume has fallen below 700 million, a result of the industry's past &#34;focus on growth while neglecting real market demand&#34; leading to excessive card issuance. Since 2022, regulatory authorities have imposed strict constraints on the proportion of &#34;sleeping cards,&#34; requiring that the long-term sleeping card rate must not exceed 20%, prompting banks to actively clean up ineffective cardholders.
However, he believes that the 20% red line has extended implications: since sleeping cards constitute a continuous cost burden for banks, they often &#34;overachieve&#34; in the actual cleanup process, and the actual cleanup ratio is likely to exceed regulatory requirements.
The background of this cleanup action stems from regulatory rectification of industry irregularities. On July 7, 2022, the former China Banking and Insurance Regulatory Commission and the People's Bank of China jointly issued a notice on &#34;Further Promoting the Standardized and Healthy Development of Credit Card Business,&#34; clearly stating that banks must not use the number of cards issued as a single or primary assessment indicator, and institutionally setting a hard limit that &#34;the long-term sleeping card rate must not exceed 20%.&#34; This marks the transition of the credit card industry from a past phase of extensive scale expansion to a new cycle focused on quality and standardized development.
From the comparison of cumulative card issuance data in the financial reports of state-owned banks for the first half of 2025 with the same period in 2024, the intensity of this adjustment can also be glimpsed: except for Agricultural Bank, which did not disclose specific data, Industrial and Commercial Bank of China saw a reduction of about 4 million cards, China Construction Bank reduced about 2 million cards, Bank of Communications reduced about 4.79 million cards, and Postal Savings Bank reduced about 1 million cards, while only Bank of China increased nearly 2.4 million cards.
Table 2
Table 3
(Comparison of card issuance volume of major banks in 2025 and the first half of 2024, source: reports by our reporters Zhang Xin and Guo Congcong, compiled from financial reports and interviews)
It is worth noting that, according to our reporter's understanding, three types of data are commonly used in the measurement system of credit card business to characterize its scale and quality. Different financial institutions disclose data using varying criteria.
First, cumulative card issuance volume refers to the total number of all credit cards issued by the bank historically, serving as a reference indicator for observing long-term business development. Large institutions like Industrial and Commercial Bank of China, China Construction Bank, and Bank of China often disclose this in their financial reports.
Second, the outstanding balance or active cards specifically refers to the number of cards currently held, activated, and not canceled, which is closer to the actual business activity level.
Third, the number of credit card accounts refers to the total number of independent customers holding credit cards from that bank. Regardless of how many credit cards a customer holds, they are usually counted as one account, mainly used to measure the breadth of customer coverage in the business.
For example, a customer at a certain commercial bank may have cumulatively applied for 10 cards (cumulative card issuance volume), but only uses 4 regularly (active card volume), and is counted as 1 customer (account number).
If the decline in card issuance is the &#34;surface&#34; of the industry adjustment, then the shrinking of benefits is the &#34;essence&#34; of this adjustment.
During the industry adjustment period, the reduction of credit card benefits has become a common phenomenon, and &#34;warm upgrade&#34; has become a helpless term used by users to describe the reduction of bank benefits.
Reporters from the 21st Century Business Herald learned from multiple credit card users that the term &#34;warm&#34; originated from the fact that some banks often use phrases like &#34;optimization upgrade&#34; and &#34;service enhancement&#34; when announcing benefit adjustments, while the actual content of the adjustments is the reduction of core benefits. Over time, &#34;warm upgrade&#34; was simplified to &#34;warm,&#34; becoming a high-frequency term for users to complain about the reduction of credit card benefits on social networks.
From the perspective of various banks' benefit adjustments, the scope of &#34;warm&#34; almost covers all categories of benefits: the points redemption ratio has been lowered, and what used to require 1,000 points for Starbucks now requires 1,500 or even 2,000 points; the number of free airport lounges and high-speed rail lounges has been reduced or canceled; value-added services such as free health check-ups, teeth cleaning, and roadside assistance have either reduced frequency or been directly canceled; some banks have even raised their annual fee standards without corresponding increases in benefits.
Dong Zheng pointed out that in the past, the credit card market mainly relied on the &#34;three high model&#34; to attract customers, namely &#34;high grade, high benefits, high limit,&#34; achieving rapid card issuance and scale expansion. The recent contraction of benefits is actually a way for banks to encourage users who are less sensitive to the &#34;three highs&#34; to exit, forming a so-called &#34;crowding-out effect,&#34; gradually optimizing the composition of credit card holders.
Among the users being crowded out, there are many arbitrage-type individuals. These users typically hold multiple credit cards, are well-versed in the points and benefits rules of various banks, and engage in card swiping behavior without real consumption transactions to earn points, redeem miles or high-end hotel benefits, and even resell benefits for profit.
As arbitrage-type users exit, genuine demand users are retained. Meanwhile, those lacking real consumption ability, relying on credit card cash withdrawals or excessive overdrafts, are beginning to expose their potential risks.
This phenomenon was confirmed in the bad debt rate data for 2025. In the first half of 2025, the bad debt rates of credit cards from several banks, including Industrial and Commercial Bank of China, China Minsheng Bank, and Industrial Bank, exceeded 3%, with Bank of Communications close to 3%, and China Construction Bank, Ping An Bank, and Shanghai Pudong Development Bank all exceeding 2%.
The wave of industry adjustment will ultimately affect every user. However, facing the same wave, different people have chosen different coping strategies.
In recent years, &#34;credit card decluttering&#34; has become a hot topic on social networks. Some people share their journey of reducing their cards from dozens to two, and some even compile detailed &#34;card cancellation guides,&#34; teaching others how to cancel credit cards step by step.
The reasons behind this are varied: some discovered their savings were running low after &#34;naked resignation&#34;; some began to reflect on irrational consumption; some were exhausted by the annual fee rules of credit cards; and some decided to return to a &#34;spend what you have&#34; consumption method after damaging their credit due to missed payments
Liu Xiao, a university teacher born in the 1990s, represents the voice of the &#34;minimalist&#34; approach. She only holds a government-issued public credit card for research reimbursements, while her daily expenses rely on internet credit products like Huabei and Jiebei.
&#34;I am used to Huabei; timely repayments are more worry-free. With credit cards, I have to remember the interest-free period and calculate discounts. Managing multiple cards is too troublesome,&#34; Liu Xiao said.
In contrast to Liu Xiao, Mr. Wang, a financial practitioner, is a representative of the &#34;deeply dependent&#34; credit card users. He holds multiple credit cards with a total credit limit of nearly one million. Looking back on his more than ten years of credit card history, he jokingly refers to his first &#34;million&#34; milestone in life as coming from the accumulated credit limit of his credit cards—his first card in 2013 had a limit of 10,000 yuan, and now a card from a certain state-owned bank has a limit of 300,000 yuan. This accumulation of limits gives him a strong sense of financial security.
However, even seasoned users like Mr. Wang are starting to cut back. He admits that in recent years, the benefits of credit cards have noticeably shrunk, and he plans to keep only two bank credit cards by the end of the year, closing the rest. &#34;Currently, only these two banks still offer 'payment discounts'.&#34;
There is also a group of users who choose a &#34;flexible adaptation&#34; middle ground. Ms. Wang, an employee of an internet company, mainly uses a credit card from a city commercial bank, sharing limits between her domestic account and an overseas VISA account. &#34;Traveling abroad is a necessity, and credit cards are essential.&#34; In her daily spending, she participates in small discount activities offered by the card and prioritizes using it for interest-free installment activities on platforms like Taobao.
&#34;Interest-free installments are equivalent to extending the payment period at no cost, which is very cost-effective,&#34; Ms. Wang said.
After the peak of the incremental market's dividends, deepening the existing market has become the only way out for credit cards.
Dong Zheng suggests that credit card businesses should deeply integrate with users' life trajectories, refining and solidifying benefits, and embedding them into cardholders' essential consumption and daily life scenarios.
&#34;For example, when users drive to an outlet shopping center, they can enjoy parking fee reductions by using a designated credit card for payment; or, for office workers living in Chaoyang District, paying for subway commuting with a credit card can provide continuous fare discounts,&#34; he stated. Through such high-frequency and essential scenarios, credit cards are no longer just payment tools but become &#34;partners&#34; that enhance users' convenience and consumption experience, thereby increasing user stickiness and activity.
(Names in the text are pseudonyms at the request of the interviewees.)

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China's credit card market is undergoing profound adjustments, with the number of cards issued dropping to 696 million, a new low in nearly seven years. Credit card benefits have significantly shrunk, and the industry is bidding farewell to the "three highs era" of high issuance, high benefits, and high limits. Consumers are choosing to reduce the number of credit cards and are turning to internet credit loans. Industry insiders believe that credit cards have not lost their appeal, as credit consumption is still deeply integrated into daily transactions in the digital age. In the future, credit card businesses need to shift from focusing on growth to managing existing accounts, considering how to maintain a unique position amidst diverse payment options

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In-depth | Credit Cards Say Goodbye to the "Three Highs" Era: Who is Leaving, Who is Holding On?