Major state-owned and joint-stock banks, including China Guangfa Bank, Shanghai Pudong Development Bank (600000.SH), Postal Savings Bank of China (601658.SH), Bank of Communications (601328.SH), China CITIC Bank (601998.SH), and China Merchants Bank (600036.SH), have halted issuing co-branded credit cards. Rural commercial banks like Zhejiang Rural Commercial United Bank have also announced similar adjustments or discontinuations, affecting sectors such as e-commerce, entertainment, and travel.
Co-branded credit cards, once a popular tool for customer acquisition, are now being phased out en masse. Industry analysts attribute this trend to rising operational costs, asset quality pressures, regulatory requirements to reduce inactive cards, and reluctance from partner brands to offer profit-sharing incentives. Data shows at least 63 credit card service centers have closed this year. By Q3 2025, the total number of credit and debit cards in China dropped to 707 million, marking a 12-quarter consecutive decline and a reduction of approximately 100 million cards since the 2022 peak.
Fu Yifu, a researcher at Jiangsu Merchant Bank, explained that co-branded cards previously helped banks expand market share by tapping into niche customer segments through partnerships with e-commerce platforms, airlines, and other service providers. These cards offered tailored benefits like discounts, bonus points, and exclusive services, enhancing user engagement and transaction frequency. However, high licensing fees, imbalanced cost-benefit ratios, and regulatory shifts have rendered many co-branded programs unsustainable.
Economist Yu Fenghui noted that waning popularity of partnered brands and stricter financial regulations have further accelerated the decline. Meanwhile, China's credit card industry is transitioning from volume-driven growth to profitability-focused strategies, with banks increasingly leveraging data analytics to optimize existing customer relationships.
Parallel to this shift, consumer preferences are evolving. Younger generations are avoiding credit cards due to concerns about overspending, preferring debit cards or buy-now-pay-later services like Ant Group's Huabei, Douyin's Monthly Pay, and Meituan's Monthly Pay. Survey data from the 2025 Digital Transformation of Consumer Finance Report indicates that middle-aged and high-income groups remain the core credit card users, averaging 10.4 transactions worth 5,326 yuan monthly. About 31% of respondents cited aversion to debt as their reason for canceling cards.
The retreat of co-branded cards reflects broader changes in China's financial landscape—where regulatory scrutiny, digital disruption, and shifting consumption patterns are reshaping traditional banking products.
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