This year, the "downsizing" adjustments of credit card centers have drawn significant attention. On social media platforms, numerous users have reported declining credit card benefits across multiple banks. Moreover, several banks have announced adjustments to their credit card business institutional layouts.

**Key Points** - Banks achieve profitability and enhance customer stickiness through credit card installment services, while users benefit from reduced monthly repayment pressure. - Data from bank annual reports show that multiple listed banks face declining card issuance volumes.

In August this year, Ms. Zheng, a Shanghai resident, received a customer service call from a bank's credit card department suggesting she convert her monthly bill into installments. The bank offered a discount coupon that would reduce the annualized rate to around 4%.

Ms. Zheng was puzzled - given her good repayment history, why would she receive such a call? After discussing with friends, she learned that many others had similar experiences.

One of her friends, who holds a state-owned bank's credit card, has been receiving monthly repayment reminder texts stating: "You can apply for bill installments for this period's statement."

"We are now vigorously developing installment business and have established dedicated departments for this purpose," a credit card business professional from a joint-stock bank told reporters.

On the flip side, the credit card industry is undergoing "downsizing" adjustments, with many banks choosing to adjust and close credit card branch offices. According to incomplete statistics, over 40 bank credit card sub-centers have received approval for closure since the beginning of this year.

Su Xiaorui, a senior researcher at Suxi Intelligence Research, stated that banks are conducting intensive adjustments to credit card benefits, products, and sub-centers because the current credit card industry faces increasingly fierce competition in the credit consumption market, pressure on credit assets, and continuously refined financial consumer protection work, standing at a crossroads of transformation.

Multiple research professionals mentioned that credit cards have transitioned from an "incremental customer acquisition" era to "stock competition" era.

Su Xiaorui believes that during the stock competition phase of the credit card industry, which coincides with rapid technological advancement, utilizing big data, artificial intelligence, and other new technologies to improve efficiency for traditional credit card business presents opportunities. However, under the challenging environment of pressured credit card asset quality and increasingly widespread use of internet credit payment products, credit cards indeed face some internal and external challenges.

**Marketing Installments**

Credit card installment repayment is not a new service - it provides eligible credit cardholders with installment repayment services for qualifying transactions on their credit cards.

Dong Zheng, a veteran credit card researcher who holds multiple bank credit cards and maintains good repayment records with full payments, has also received numerous calls from banks suggesting installments.

He believes that credit card installment business should focus primarily on customers who make "minimum payments" rather than those who pay in full. "Installment business can be considered small-amount consumer credit business, similar to consumer loans with installment payments, dividing products or bills into multiple periods. Banks achieve profitability by receiving periodic repayment amounts and handling fees (or interest)."

Dong Zheng believes that through installment services, banks not only achieve profitability but also enhance customer stickiness, while users benefit from reduced monthly repayment pressure.

A credit card business professional from a joint-stock bank in southern China told reporters that their credit card institution currently places great emphasis on risk management. "Those receiving installment suggestions are often users with excellent credit profiles."

Regarding credit card non-performing loan ratios, as of the end of 2024, banks like Minsheng Bank and Shanghai Pudong Development Bank saw increases in credit card non-performing rates. Minsheng Bank's credit card loan non-performing rate was 3.28%, up 30 basis points from the previous year-end; SPD Bank's credit card and overdraft non-performing rate was 2.45%, up 0.02% from the previous year-end; China Everbright Bank's credit card overdue rate was 1.50%, up 20 basis points from 2023. Additionally, China Merchants Bank's non-performing loan rate was 0.95%, unchanged from 2023 year-end; Industrial Bank's credit card non-performing loan rate was 3.64%, down 29 basis points from the previous year-end.

Under the "contraction" of credit card business, installments have become an option. For example, China Construction Bank mentioned in its 2024 annual report that it focused on car purchase, renovation, and general installment products last year, strengthening precise marketing at payment touchpoints. Bank of China also mentioned deploying key scenarios, implementing national support for "trade-in" policies, launching specialized credit card installment product service solutions to support car replacement upgrades, old house renovations, and appliance and furniture replacements.

Ms. Zheng noted that with installment discount coupons, installment interest rates can be comparable to bank consumer loan rates, representing a significant decrease compared to previous years. Moreover, installment rate displays have become more formal, showing both installment handling fees and "approximate annualized rates" on the same page.

Since the beginning of this year, credit card centers' "downsizing" adjustments have attracted attention.

On social media platforms, numerous users have reported declining credit card benefits across multiple banks. Additionally, several banks have announced adjustments to their credit card business institutional layouts.

As of the end of July, over 40 credit card branch offices from banks including Bank of Communications, Minsheng Bank, and China Guangfa Bank received approval to cease operations. Bank of Communications closed over 30 credit card sub-centers. Minsheng Bank Credit Card Center closed its South China, Central China, Northeast, and North China sub-centers; China Guangfa Bank Credit Card Center closed its Changji and Mudanjiang sub-centers.

Su Xiaorui believes that internally, credit card development has been relatively extensive, with room for improvement in product innovation capabilities; externally, credit cards face competition from major tech companies' credit payment products for scenario traffic portals. The series of phenomena including benefit reductions, product discontinuations, and sub-center closures reflects the credit card industry's transformation toward intensive development.

**Stock Competition**

Statistical data shows declining card issuance volumes.

The People's Bank of China's "Overall Payment System Operation in Q1 2025" shows 721 million credit cards and debit-credit combination cards nationwide at the end of Q1. The "2024 Overall Payment System Operation" shows 727 million cards at the end of 2024, a decrease of approximately 40 million from 2023 year-end, down 5.14% year-over-year. After reaching a peak of 807 million cards in Q3 2021, this marks the tenth consecutive quarter of decline.

Data from bank annual reports show multiple listed banks facing declining card issuance volumes. As of the end of 2024, ICBC's cumulative credit card issuance decreased 1.96% year-over-year to 150 million cards, maintaining the industry's top position. CCB's cumulative credit card issuance decreased by 3 million cards to 129 million cards compared to the previous year-end.

China Merchants Bank, known for retail business excellence, had 96.86 million circulating credit cards and 69.44 million circulating accounts at the end of 2024, representing decreases of 259,100 cards and 299,500 accounts respectively from 2023 year-end. Ping An Bank had 46.93 million credit card circulating accounts, down 12.92% year-over-year, with total annual credit card consumption of 2.32 trillion yuan, down 16.57% year-over-year.

Su Xiaorui suggests that the key elements for sustainable development of bank credit card business are focusing on product innovation, scenario applications, and asset quality to achieve lean development in the stock market. She observes that credit cards are promoting a shift from aggressive "card issuance and customer acquisition" to "intensive stock cultivation" business strategies, moving from quantity focus to quality emphasis, using value contribution as an anchor to reshape credit card business logic. Meanwhile, retail integration development thinking is becoming increasingly popular, combining savings, wealth management, loans, and credit card businesses to enhance comprehensive financial service quality for high-end customer groups, making high-end customer retention more efficient and bringing more profit contributions to credit card institutions.

Dong Zheng also told reporters that banks currently find it difficult to increase new card issuance and should seek consumer demand targets among existing users and scenarios. Meeting consumers' rigid demands and catering to their consumption needs means credit cards should adapt to customers rather than customers changing consumption habits for credit cards.

Beyond card issuance volumes, some banks' credit card consumption amounts are also declining. As of the end of 2024, Bank of China had 147.94 million cumulative credit cards issued and 593.4 billion yuan in loan balances, increasing 2.66% and 7.62% year-over-year respectively, but credit card consumption and installment transaction amounts decreased 7.66% and 2.3% respectively year-over-year. CCB's total credit card consumption was 2.8 trillion yuan, down approximately 4.44% year-over-year; ICBC's credit card consumption was 2.13 trillion yuan, down approximately 3.23% year-over-year; Bank of Communications' domestic banking institution credit card registered cards totaled 63.01 million, down 11.66% year-over-year, with cumulative credit card consumption of 2.45 trillion yuan, down 12.81% year-over-year; China Merchants Bank achieved credit card transaction volume of 4.42 trillion yuan, down 8.23% year-over-year.

Su Xiaorui believes that the key elements for sustainable development of bank credit card business are focusing on product innovation, scenario applications, and asset quality to achieve lean development in the stock market. Currently, she observes that credit cards are focusing on high-net-worth customers, primarily promoting high-end card products, driving the transformation from aggressive "card issuance and customer acquisition" to "intensive stock cultivation" business strategies, shifting from quantity focus to quality emphasis, using value contribution as an anchor to reshape credit card business logic. Meanwhile, retail integration development thinking is becoming increasingly popular, combining savings, wealth management, loans, and credit card businesses to enhance banks' comprehensive financial service quality for high-end customer groups, making high-end customer retention more efficient and bringing more profit contributions to credit card institutions.