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].