Core Insights - The People's Bank of China reported a decline in the total number of credit cards and combined loan cards to 715 million by the end of Q2 2025, a decrease of 6 million from the previous quarter, marking the 11th consecutive quarter of decline since Q3 2022 [1] - In response to the overall contraction in credit card business, banks are increasingly focusing on installment services as a key growth area, optimizing product design, lowering installment fees, and simplifying application processes to attract more customers [1][2] Industry Trends - The continuous decline in card issuance is attributed to market saturation, with banks actively cleaning up dormant cards and high-risk customers, and regulatory policies discouraging the use of card issuance volume as a sole performance metric [2] - The shift in focus from scale expansion to quality control reflects a broader industry transformation, with banks enhancing their installment offerings to meet consumer demand for large purchase financing [2][4] Business Strategies - Several banks have recently introduced measures to optimize installment services, including fee reductions for large purchases such as home renovations and appliances, with some banks offering annualized rates as low as 2.16% [3] - Banks are also simplifying processes by implementing features like "one-click installment" through mobile banking apps, significantly reducing approval times from 1-3 days to just minutes [3] Customer-Centric Approach - The push for installment services aligns with national policies promoting consumption, indicating a strategic shift in credit card business models from volume-driven growth to deepening customer value [4][5] - Banks are encouraged to adopt responsible financial practices, ensuring transparency in fee structures and repayment terms while avoiding aggressive competition that could harm consumer interests [5] Future Outlook - The sustainable development of credit card businesses hinges on creating a customer-centric ecosystem, leveraging intelligent risk control, and embedding services within high-frequency consumption scenarios [5] - The transition from credit cards as mere payment tools to retail ecosystem hubs is emphasized, balancing commercial value with social responsibility [5]