Core Viewpoint - The credit card industry in China is entering a "tide retreat" phase by 2025, with significant declines in credit card loan balances and transaction volumes observed across multiple banks [1][2][4]. Group 1: Decline in Credit Card Metrics - In the first half of 2025, over half of the listed banks reported a decrease in credit card loan balances compared to the beginning of the year [1]. - China Bank's credit card loan balance was 522.50 billion yuan, down 13.88% from the end of 2024, marking the first half-year decline since 2020 [2]. - Postal Savings Bank experienced a 5.67% decline in credit card loan balances, the largest drop in nearly a decade [2]. - Construction Bank saw its first half-year decline since 2010, with a decrease of 1.04% in credit card loan balances [2]. - Credit card annual cumulative transaction volumes have stagnated since 2019, with some banks like China CITIC Bank and Bank of Communications reporting declines exceeding 10% year-on-year [2]. Group 2: Revenue Shrinkage - Credit card business revenues for major banks have contracted, with China Merchants Bank's revenue peaking at 92.05 billion yuan in 2022 before declining [3]. - CITIC Bank's credit card revenue peaked at 61.50 billion yuan in 2020, also showing a downward trend thereafter [3]. Group 3: Industry Challenges - The credit card issuance peaked in 2021, with subsequent annual declines noted [4]. - Regulatory measures introduced in 2022 aimed to manage "sleeping" credit cards, limiting the proportion of such cards to no more than 20% of total issued cards [4]. - The industry faces intense competition due to product and service homogenization, leading to increased customer acquisition costs and lower customer loyalty [6][7]. Group 4: Strategic Shifts - Banks are shifting focus towards risk management and prudent operations as the new norm in credit card business [5][6]. - Strategies include segmenting customers based on risk, with high-risk clients being gradually phased out while enhancing engagement with mid-risk clients [8]. - There is a notable shift from acquiring new customers to enhancing the value of existing customers due to rising acquisition costs [10]. Group 5: Market Adaptation - Banks are exploring regional market potentials, with initiatives like the "Hundred Counties, Ten Thousand Stores" program by China Merchants Bank targeting county-level markets [10]. - High-end credit card products are being introduced to attract affluent customers, such as Agricultural Bank's American Express Black Card [10]. - A focus on high-quality customer acquisition strategies is being emphasized, as seen in China Merchants Bank's 2025 mid-year report [10].

Core Viewpoint - Several banks have adjusted consumer loan interest rates, ceasing discounts below 3%, while simultaneously offering promotional rates for credit card cash installment services, indicating a shift in strategy towards more refined customer management in credit card operations [1][5]. Group 1: Credit Card Cash Installment Promotions - Banks like China Merchants Bank and Bank of Communications are offering significant discounts on cash installment rates, with annualized rates as low as 2.76% and 5.49% for specific terms [2][3]. - Credit card cash installment services allow banks to provide cash credit directly to customers' designated accounts, with flexible repayment options and generally do not occupy credit card limits [3][4]. Group 2: Market Trends and Regulatory Environment - The People's Bank of China has emphasized the need for financial institutions to support consumer loans, which may lead to increased competition in the retail loan market [5][6]. - The credit card market is transitioning from a phase of broad expansion to one of meticulous management, with a decline in the issuance of new cards due to market saturation and stricter regulations [6][7]. Group 3: Industry Challenges and Future Outlook - The proportion of credit card loans in retail lending has decreased from 13.09% in 2022 to 12.54% in 2024, while personal business and consumer loans have seen an increase [6][7]. - Industry experts suggest that the focus should shift towards retaining valuable customers and leveraging technology and risk management to ensure sustainable growth in the credit card sector [7].