Core Insights - The credit card market in China is undergoing a significant adjustment, transitioning from aggressive issuance to a focus on reducing inventory and enhancing compliance [1][3][4] - As of Q3 2025, the total number of credit cards and lending cards has decreased to 707 million, down from a peak of 807 million in Q3 2022, marking a reduction of 100 million cards over three years [3][4] - Regulatory measures introduced in 2022 have imposed strict limits on card issuance, targeting the reduction of "sleeping cards" and promoting healthier growth practices within the industry [4][6] Market Dynamics - The previous era of rapid card issuance, characterized by practices like "door-to-door marketing," has led to a significant number of inactive cards, which pose compliance risks and waste resources [3][4] - The shift in consumer demographics, with younger generations showing less interest in traditional credit cards, is contributing to the market's contraction [6][7] - The rise of digital credit products and mobile payments is increasingly replacing traditional credit cards in everyday transactions, particularly in small and frequent payment scenarios [5][6] Strategic Shifts - Financial institutions are now focusing on enhancing customer retention and transaction activation rather than merely increasing the number of issued cards [6][7] - Banks are collaborating with various high-frequency consumption scenarios, such as supermarkets and public transport, to offer co-branded cards and exclusive benefits, thereby increasing card usage [6][7] - The evolution of credit cards is moving towards becoming comprehensive lifestyle platforms, integrating services like ticketing and health management into their offerings [6][7] Future Outlook - The core value of credit card services is shifting from merely encouraging overspending to providing safer, more convenient, and value-added financial services [7] - In the context of macroeconomic policies aimed at boosting consumption, the credit card industry is expected to maintain a significant role in the payment system and consumer finance [7] - The "Matthew Effect" is anticipated to intensify, with resources and profits concentrating among institutions that excel in risk management, customer base, and service quality [7]