Credit Card Market Sees 120 Million Cards Vanish Over Three Years as Streamlining Continues

Data recently released by the People's Bank of China indicates a continuing decline in the total number of credit cards in circulation nationwide. By the end of the first quarter, the number of credit and debit-credit combo cards stood at 687 million, a decrease of 9 million from the end of 2025. This marks the 14th consecutive quarter of decline, with the total having fallen by approximately 120 million cards from the peak of 807 million recorded in the third quarter of 2022. On average, over 8 million cards have been withdrawn from the market each quarter for more than three years.

The disappearance of these 120 million cards can be traced back to the industry's development over the past decade. Around 2015, driven by consumer spending upgrades and banks' retail transformations, credit cards became a key battleground for banks, with annual issuance growing at double-digit rates. By Q3 2022, the total reached a historic high of 807 million, equating to roughly 0.7 cards per adult. However, this rapid growth led to issues such as a high volume of inactive "sleeping cards," over-indebtedness from multiple credit lines, and a gradual rise in non-performing loan (NPL) ratios post-2020. Regulatory measures since 2021 have mandated the cleanup of long-inactive cards and stricter credit management.

The widespread adoption of mobile payment tools like Alipay and WeChat Pay has also significantly reduced the frequency of physical card use. Furthermore, an analyst noted that the decline in issuance reflects a shift in consumer credit demand from excessive spending to more rational borrowing, alongside banks' proactive efforts to reduce exposure to high-risk, multi-debt customer segments. This slowdown is viewed as a positive signal for risk clearance and customer base optimization.

This risk clearance, however, comes with consequences. Key metrics such as credit card loan balances and annual spending volume have generally declined year-over-year at major state-owned and listed joint-stock banks. By the end of 2025, 03988 saw its credit card loan balance drop 18% to 4.86 trillion yuan, with annual spending and installment transaction volumes also falling by double digits. 01398 reported a 10.04% decline in outstanding credit card balances to 6.98 trillion yuan and a 14.08% drop in spending volume to 18.3 trillion yuan. 01658 and 03328 also experienced declines exceeding 10%.

Simultaneously, NPL ratios for credit cards at major banks have been rising. 01398's credit card NPL ratio reached 4.61% at the end of 2025, up 1.11 percentage points from the previous year-end, becoming the primary driver of its overall personal loan NPL ratio. 01988, 03328, 00998, and 00939 also reported increases in their credit card NPL ratios. Conversely, banks like 03968 have passed an inflection point, achieving a decrease in their credit card NPL ratios.

Parallel to the contraction in issuance and rising NPLs, banks are reassessing their online credit card channels. On May 13, 03988 announced that its dedicated credit card app, "Colorful Life," would cease operations on June 30, 2026, with its functions migrating to the bank's main app. This makes it the first major state-owned bank to shut down a standalone credit card application. This move, while novel for large banks, has become common among smaller institutions, with several regional banks having announced similar consolidations into their main mobile banking platforms in 2025.

The rationale for abandoning standalone apps is straightforward from a user perspective. Many cardholders report managing bills, repayments, and rewards through platforms like WeChat, Alipay, or their primary banking app, negating the need for infrequently used dedicated applications. This shift in user behavior is reflected in declining monthly active users (MAU). For instance, 00998's credit card app MAU fell by over 2.7 million users in 2025. Even 03968's market-leading app saw MAU growth of less than 1% in 2025, a stark contrast to its previous rapid expansion.

Analysts suggest banks should move away from reliance on independent channels. While the standalone credit card channel model is dissolving, the core functions of credit cards as account vehicles and consumer credit tools will persist and should be more efficiently integrated into comprehensive financial ecosystems.

Beyond online channels, physical outlets and product offerings are also contracting. Media reports indicate 66 credit card sub-centers closed in 2025, with 03328 accounting for 58 of those closures. In the first four months of 2026, banks including 03328 and 01988 announced the discontinuation of over 42 credit card products, predominantly co-branded and themed cards.

Looking ahead, the focus for credit card development is expected to shift from competing on card volume to deepening account management and integrating with broader lifestyle and consumption ecosystems. The future competitive edge will lie in creating profit based on a customer's lifetime value rather than perks like sign-up gifts or fee waivers. Experts emphasize that banks must reposition credit cards as a hub connecting retail banking and consumption, rather than an isolated product line, to build a sustainable profit model in an era of market saturation.