Core Insights - The credit card industry in China is experiencing a significant downturn, with issuance volumes declining for ten consecutive quarters, leading to a total of 721 million credit cards by Q1 2025, down from a peak of 807 million in 2022 [4][5][6] - Promotional activities, such as offering bicycles for credit card sign-ups, reflect the intense competition and pressure on banks to attract new customers, despite the overall decline in credit card usage [2][5] - The industry is shifting from a growth phase to a focus on existing customer retention and service quality, as the previous strategies of aggressive customer acquisition are no longer effective [5][24] Industry Trends - The credit card issuance cost has increased significantly, with costs reaching up to 200 yuan per card, compared to earlier years when no incentives were necessary [4][5] - Credit card delinquency rates have risen, with the overdue amount exceeding 123.96 billion yuan by the end of 2024, marking a 26.31% year-on-year increase [5][6] - The number of credit cards in circulation is decreasing, with over 40 credit card centers shutting down since 2025, indicating a contraction in the market [6][7] Market Dynamics - The market is now characterized by a "stock game" where banks must focus on retaining existing customers rather than acquiring new ones through incentives [5][24] - Many banks are reducing the benefits associated with credit cards, such as airport lounge access and other premium services, in response to the changing market conditions [6][7] - The trend of discontinuing co-branded credit cards is evident, with numerous banks ceasing to offer popular co-branded products due to low engagement and inefficiency [7][8] Future Outlook - The credit card industry is expected to evolve towards providing enhanced customer experiences and tailored services, rather than merely focusing on the volume of cards issued [19][24] - The integration of advanced technologies such as AI and big data is anticipated to play a crucial role in improving service delivery and customer engagement in the credit card sector [19][24] - Despite the challenges, credit cards remain a vital tool for consumer finance, with a total outstanding credit card loan balance of 8.71 trillion yuan, significantly higher than that of consumer finance institutions [19][24]

Core Viewpoint - The credit card market is undergoing significant adjustments, with multiple banks, including Bank of China, ceasing the issuance of certain credit card products, particularly co-branded cards, due to market, regulatory, and operational pressures [1][2][3]. Market Environment - The credit card business has entered a phase of stock competition, leading banks to streamline their product lines and focus on high-frequency usage scenarios [3]. - As of the first quarter of 2025, the total number of credit cards and loan cards in circulation has decreased to 721 million, marking the tenth consecutive quarter of decline [3]. Regulatory Environment - Financial regulators are enhancing the oversight of credit card cooperative businesses, urging banks to manage the qualifications of partners and the risks associated with benefit redemption [3]. - New regulations are pushing banks towards a more refined operational model, encouraging the exit of inefficient products from the market [3]. Operational Adjustments - Banks are increasingly reducing reliance on external brands and shifting towards building self-controlled consumption ecosystems, integrating comprehensive services to enhance user engagement and data management [2]. - The operational costs associated with maintaining multiple card types are prompting banks to discontinue low-efficiency products and migrate existing users to standardized offerings [3]. Future Directions - The future of credit card business is expected to focus on three transformation directions: 1. Integrating all-encompassing scenarios to create a self-operated consumption ecosystem that includes various services [4]. 2. Upgrading technology to enhance digital service experiences and improve asset quality through intelligent risk control [4]. 3. Deepening customer segmentation to cater to specific user groups, transitioning from "scale issuance" to "value creation" [4].

Core Insights - The core viewpoint of the news is that UnionPay is adjusting its card benefits strategy to enhance the value of its Diamond Card, amidst a declining trend in credit card issuance in China [2][4][12] Industry Overview - The credit card industry is transitioning from a phase of rapid expansion to a new stage focused on quality over quantity [3][12] - The number of credit cards and loan cards in China has decreased to 721 million by the end of Q1 2025, marking the ninth consecutive quarter of decline [2] Strategic Adjustments - UnionPay's adjustment in benefits is aimed at reallocating resources towards high-net-worth clients, ensuring that Diamond Cardholders receive more exclusive and high-quality benefits [5][8] - This shift reflects a broader trend among banks to adapt to the changing landscape of the credit card industry, where traditional strategies are being challenged [4][6] Market Dynamics - The credit card sector has seen a significant increase in customer acquisition costs, rising from 50 yuan in 2015 to 200 yuan in 2023, a 300% increase [6] - The proportion of "sleeping cards" has reached 30%-40%, leading to increased management costs and pressure on asset quality [6] Regulatory Environment - Regulatory changes have directed banks to focus less on card issuance volume and more on compliance and risk management, with a cap on sleeping cards set at 20% [7] Competitive Landscape - Major banks, including Guangfa Bank, are adopting strategies that prioritize quality over quantity, focusing on high-net-worth clients and integrating credit cards with wealth management services [8][9] - The competition for high-end credit cards is shifting from mere consumer discounts to offering unique services and lifestyle solutions [8][10] Future Outlook - The credit card industry is expected to undergo a significant transformation, emphasizing customer quality and risk management, which will reshape the industry's ecosystem for sustainable growth [12][13]