Bank Credit Card Business Undergoing Deep Restructuring: Number Drops Below 700 Million Cards, Non-Performing Asset Disposal Accelerates Across the Board

Financial Times Reporter Xie Zhongxiang

Over the past year, China’s credit card market continued to shrink, and industry adjustments have entered the “deep water zone.” Recently, the People’s Bank of China released the “2025 Payment System Operation Overview,” which shows that by the end of last year, the total number of credit cards and loan-integrated cards nationwide was 696 million, a decrease of 11 million from the third quarter, officially falling below 700 million. The industry scale has been declining for several consecutive years.

While the number of issued cards continues to decline, banks are fully adjusting their credit card businesses, including halting co-branded card issuance, integrating online apps, shutting down offline credit card branches, and accelerating the transfer of bad credit card assets. These measures indicate that credit card operations are gradually moving away from aggressive expansion, further focusing on cost reduction and efficiency in the era of existing customer management, and optimizing business structures.

Approximately 31 million fewer cards expected in 2025

Annual data shows that credit card issuance has declined for three consecutive years. The latest data from the People’s Bank of China indicates that by the end of Q4 2025, the total stock of credit cards and loan-integrated cards nationwide dropped to 696 million, a reduction of about 31 million from the end of 2024, and a decrease of 111 million from the peak at the end of Q3 2022. This scale approaches the 686 million cards at the end of 2018, hitting a nearly 7-year low.

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 strengthened oversight and regulation of bank credit card operations, and issuance volume, customer numbers, market share, or market ranking are no longer primary or sole performance indicators for banks.

Data from listed banks shows that most state-owned banks have significantly reduced their credit card issuance, while some joint-stock and city commercial banks have achieved countercyclical growth.

According to a review of credit card business data disclosed by some listed banks over the past two years, as of the end of June 2025, major 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-over-year, by 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 growth, with CITIC Bank increasing by about 6.37 million cards, and Bank of China and Huaxia Bank growing by 2.34 million and 1.8 million respectively.

Senior credit card industry analyst Dong Zheng believes that the scale of card issuance has lost its role as a true indicator of credit card business health. Through the cleanup of dormant cards over the past three years, the bubble in total issued cards has been squeezed out, objectively breaking the illusion of scale.

Dong Zheng states that from a market competition perspective, the evolution of the payment ecosystem and competitive products have impacted credit cards. Mobile payments have deeply integrated into daily life, relying on payment scenarios that seamlessly embed internet-based credit payment tools, significantly replacing traditional credit cards in small, high-frequency transactions.

Simultaneous Channel Adjustments

While issuance declines, banks are also adjusting their credit card channels, including shutting down and consolidating credit card apps and offline credit card branches.

According to information from the Financial Regulatory Administration, by 2025, 66 credit card branches operated by banks such as Bank of Communications, China Minsheng Bank, and China Guangfa Bank have ceased operations. Bank of Communications closed the most, with 58 branches, covering first-tier cities and some third- and fourth-tier cities; Minsheng Bank closed 5, and Guangfa Bank shut down 3 branches.

Since 2026, some city commercial banks have also joined the wave of closing credit card branches. In January, Guangzhou Bank gradually terminated operations at seven credit card branches in Shenzhen, Zhuhai, Foshan, Dongguan, and other locations.

A banking industry insider told reporters that the core reason for the “branch consolidation wave” is the reform of the credit card business model, integrating credit card operations into the local management of branches. After integration, banks can continue providing services through an “online + offline” hybrid model, embedding credit card services into wealth management, consumer loans, and other scenarios to enhance customer stickiness.

Regarding online channels, adjustments mainly focus on merging and shutting down credit card apps. In December 2025, Postal Savings Bank announced it would shut down its credit card app and integrate its functions into the mobile banking app; Bank of China also announced in September 2025 that it would migrate the “Colorful Life” app to the “Bank of China” app.

“Credit card apps and mobile banking apps have highly overlapping functions, such as credit card inquiries and payments, which are already covered in mobile banking apps. Given the currently low customer usage, maintaining separate credit card apps incurs high operational costs, making them prime targets for shutdown. We expect more banks to follow suit,” said Lou Feipeng, a researcher at Postal Savings Bank.

Lou Feipeng believes that early on, banks launched standalone credit card apps to quickly capture niche markets. Now, the industry has shifted from scale expansion to quality improvement. Banks need to adapt to market changes and digital transformation trends, moving from multiple apps to a one-stop platform, reducing operational costs, and providing comprehensive services to enhance customer experience.

Accelerating Credit Card Bad Debt Transfers

Beyond scale reduction and channel adjustments, the deterioration of credit card asset quality remains a challenge for banks.

According to statistics, many leading state-owned and joint-stock banks saw a rebound in credit card bad debt ratios in the first half of 2025, indicating some pressure on asset quality. Banks such as ICBC, Minsheng Bank, and Industrial Bank have seen their credit card bad debt ratios exceed 3%, with Bank of Communications approaching 3%. Additionally, China Construction Bank, Ping An Bank, and Shanghai Pudong Development Bank have ratios over 2%.

In response to rising bad debt pressures, banks are accelerating the bulk transfer of bad credit card assets. Since 2025, the trading of credit card bad loans has become more active. As of February 25, 2026, a total of 17 credit card bad asset packages have been listed for transfer, with an outstanding principal of up to 8.926 billion yuan. The six asset packages listed by Bank of Communications in January alone totaled 6.832 billion yuan.

Looking longer-term, some joint-stock banks have significantly cleared large volumes of credit card bad loans in 2025. Huaxia Bank transferred over 30 billion yuan in bad assets through the Silver Center in 2025, including two large transfers in August and December totaling over 22 billion yuan; Minsheng Bank listed asset packages totaling about 27 billion yuan from November to December.

Guotai Haitong Securities’ banking research team noted that increasing bad asset disposals improve financial metrics, reduce bad debt ratios and reserve coverage, and help release capital, enabling banks to allocate more resources to high-quality assets.

According to Guoxin Securities’ analysis, risks in bank retail loans, including credit card loans and personal consumer loans, are surfacing. Over recent years, the non-performing rate of credit card loans has continued to rise, though the growth rate has slowed.