120 million credit cards have disappeared in three and a half years. The post-2000s generation is quitting credit cards, and the credit card business of small and medium-sized banks is ebbing.
Lin Ai (pseudonym), a member of the post - 90s generation, has let her rural commercial bank credit card lie idle in her mobile phone wallet for more than half a year.
In October last year, Lin Ai saw the bank setting up a stall to issue credit cards. The gifts on offer were particularly eye - catching: customers could choose one from a frying pan, camping chairs and tables, a vacuum cleaner, etc. Moreover, those who opened a card could get 100 yuan in repayment credits.
With the mindset of "getting freebies", Lin Ai immediately filled out the form. The card was issued in less than 10 minutes.
However, in the more than half - year since opening the card, she has only used it twice.
"I simply can't remember to use it on a daily basis, and there aren't any particularly attractive discounts," Lin Ai said. She already has two credit cards from major banks, which are sufficient for her daily use. If she has a large - scale consumption in the future and happens to encounter an event, she might take out the rural commercial bank credit card to make a purchase.
Most of the time, this credit card remains inactive.
This is also the current state of the credit card business of most small and medium - sized banks: it hasn't disappeared, but it is becoming increasingly less noticeable.
It is an indisputable fact that the overall credit card business of banks is in decline. Data shows that as of the end of the first quarter of this year, there were a total of 687 million credit cards and combined credit - debit cards nationwide. This number is about 120 million less than the peak of 807 million in the third quarter of 2022.
In this downward trend, small and medium - sized banks' credit card businesses have been more significantly impacted than those of state - owned large banks and joint - stock banks.
Data shows that in 2025, 30 listed banks disclosed their outstanding credit card balances, with a total of about 7.39 trillion yuan, a year - on - year decrease of about 5.7%. Among them, the decline rate of urban and rural commercial banks was higher than the average. In the same year, the decline rates of the outstanding credit card balances of Jiangsu Bank, Beijing Bank, Changsha Bank, and Ruifeng Bank were 23.66%, 22.18%, 17.40%, and 33.97% respectively.
Zeng Gang, the deputy director of the National Institution for Finance and Development, stated in an interview with a reporter from Times Weekly that the credit card business is shifting from "expanding the market" to "intensive cultivation". The essence of the differentiation lies in the differentiation of profitability in the stock market.
In his view, state - owned large banks and joint - stock banks, relying on their brands, customer bases, and technological investment, can still maintain their existing customers and dig out the value of each card through benefit management, scenario binding, and refined risk control. Leading institutions such as China Merchants Bank have even maintained relatively stable transaction volumes against the trend. On the other hand, small and medium - sized banks are constrained by resources, risk control, and customer acquisition capabilities, with their outstanding credit card balances shrinking more rapidly. Some small and medium - sized banks lacking differentiated advantages will actively shrink or even withdraw from the credit card market.
For small and medium - sized banks, the credit card business is at a delicate crossroads.
Do users only come for the "freebies"? The post - 00s are reluctant to apply for credit cards
If the data reflects the pressure on the bank's business operations, then the users' feelings more intuitively explain the source of these pressures.
"Today, when you apply for a credit card, you can get gifts. It's 'choose 5 out of 10', and the quantity is limited. Usually, there aren't such rich offers," Zhang Heng (pseudonym), a staff member of a city commercial bank in the Jiangsu - Zhejiang region, told a reporter from Times Weekly at a large - scale exhibition in Shanghai recently. The on - site materials showed that the "choose 5 out of 10" gifts included keychains, card holders, plush toys, etc., and the benefits included coupon packages for instant discounts on WeChat or Alipay.
Zhang Heng said that the credit card business has been difficult in recent years. Their bank now only conducts targeted activities at large - scale exhibitions and rarely promotes actively on other days. However, at this large - scale exhibition, the number of people who applied for a card on that day was less than 5.
A staff member of another city commercial bank also told a reporter from Times Weekly that city and rural commercial banks and some smaller - scale banks issue credit cards largely to enhance customer stickiness and basically don't make a profit. "In our bank, the cost of a single credit card business is at least 500 yuan. We simply can't recoup the cost. State - owned large banks and joint - stock banks are relatively better off."
At the above - mentioned large - scale exhibition, a reporter from Times Weekly observed that there were very few city commercial banks with credit card application points, such as Bank of Hangzhou and Beijing Bank. The on - site staff of Jiangsu Bank, Nanjing Bank, Bank of Qingdao, and Rizhao Bank all said that there was no credit card application business on that day.
As small and medium - sized banks gradually reduce their marketing investment, the first change is that credit cards are becoming less noticeable in consumers' lives.
A reporter from Times Weekly interviewed several young consumers and found that most of the credit cards they hold are from China Construction Bank, China Merchants Bank, China CITIC Bank, Ping An Bank, etc., and they generally don't consider city and rural commercial banks.
Gao Hao (pseudonym), a member of the post - 00s generation, told a reporter from Times Weekly that the "freebies" from small banks are not as good as those from large banks, and he doesn't have the habit of using credit cards for consumption on a daily basis. "I'll only consider applying for a card at a small bank if I have a specific need and the card - opening benefits are attractive enough," Gao Hao said.
In terms of experience, the services of some small and medium - sized banks' credit cards have also left consumers dissatisfied.
Yu Yang (pseudonym), a credit card user of a rural commercial bank, said, "I either can't get various benefits, or I can't use them even if I get them. Even for merchants within the valid time and scope, I can't get the benefits verified." In addition, she also said that the experience of the app is poor, and many services finally need to be handled by human customer service.
Zhou Lin (pseudonym), a credit card user of a city commercial bank, said that since applying for the card, he has been charged interest and penalties by the bank several times. He thinks the fees are acceptable in themselves, but because he occasionally forgets to repay the card and can't set up automatic repayment in the app, he feels that he has "wasted money for nothing".
"Among all the banks' credit cards I've used, only this one can't set up automatic repayment." In the end, Zhou Lin chose to cancel this card.
The outstanding credit card balance has shrunk by up to 80% in three years, and the non - performing loan ratio has reached a maximum of 11.03%
The decreasing presence of credit cards may not be the most troublesome issue for banks. A more realistic dilemma is that as fewer users use credit cards, the profitability of this business is under pressure.
Generally speaking, listed banks classify credit cards as part of their personal retail business, and most of them don't disclose the income from the credit card business separately. Credit card transaction volume and outstanding balance are important indicators of business activity.
In 2025, only 6 listed banks disclosed their credit card transaction volumes, which showed an overall downward trend. The credit card transaction volume of a city commercial bank in East China was 96.605 billion yuan in 2025, a year - on - year decrease of about 12%.
The change in the outstanding balance can better reflect the pressure on small and medium - sized banks.
Enterprise Early - Warning System shows that as of the end of 2025, among the listed city commercial banks with data disclosure, 5 had an outstanding credit card balance of over 10 billion yuan. In 2025, 4 of these 5 city commercial banks saw a decline in their outstanding balances, and the decline of one of them exceeded 20%.
The outstanding credit card balances of Bank of Xi'an, Ruifeng Bank, Sunong Bank, and Wuxi Bank in 2025 were all below 1 billion yuan, and their credit card business scales were relatively small. Taking Ruifeng Bank as an example, its outstanding credit card balance reached over 4 billion yuan at the end of 2022, and it has shrunk by over 80% in the past three years.
Several young people interviewed by a reporter from Times Weekly said that for large - scale consumption and even daily consumption, credit cards are not their first choice. Savings cards, Huabei (an online consumer credit service), and other channels are also taken into consideration. This may also reflect the reason for the decline in the outstanding credit card balance from the side.
Zhang Xia (pseudonym), a post - 95s generation in Shanghai, told a reporter from Times Weekly that she has rarely used credit cards for large - scale consumption in the past two years. On the one hand, it's due to consumption downgrading; on the other hand, if she really needs to use a credit card for consumption, she will give priority to banks with longer interest - free periods and greater discounts.
While the balance is shrinking, the asset quality problems of small and medium - sized banks' credit cards are also gradually emerging.
According to the Enterprise Early - Warning System, in 2025, 15 listed banks disclosed their credit card non - performing loan ratios, and over 10 of them increased year - on - year. City commercial banks were not spared. The non - performing loan ratios of Lanzhou Bank and Zhengzhou Bank increased by 101 basis points and 21 basis points respectively compared with the end of 2024, reaching 2.8% and 2.76% respectively.
The risk pressure of some small and medium - sized banks is more prominent. At the end of 2025, the non - performing loan ratio of Dongguan Rural Commercial Bank's credit cards was as high as 11.03%, an increase of 501 basis points compared with the end of 2024. The non - performing loan ratio of Jinshang Bank reached 8.27% at the end of 2023, but no data was disclosed in 2024 and 2025.
In Zeng Gang's view, the contraction of the outstanding balance has multiple impacts on the retail business of small and medium - sized banks: the shrinking scale directly reduces the increment of retail loans and interest income. Coupled with the decline in intermediate income such as installment fees, it squeezes the already - pressured net interest margin. What's more alarming is the co - existence of "shrinking volume" and "non - performing loans" - as the balance decreases, the non - performing loan ratio rises. A smaller denominator will further push up the book non - performing loan ratio and increase the provisioning pressure.
Dong Zheng, a senior credit card expert, told a reporter from Times Weekly that the high non - performing loan ratio of credit cards reflects to some extent the risk expansion of banks during the incremental development stage.
He believes that in the past, in order to compete for market share, some banks would offer high - limit credit to acquire customers or increase credit limits to retain customers who were about to cancel their accounts. When the economy was good, continuous consumption and timely repayment could maintain the apparent health of the business. However, when the economy declines and cardholders' incomes are affected, risks may quickly turn into overdue payments and bad debts.
If they continue to issue credit cards, where is the way out?
For small and medium - sized banks, the credit card business seems to be an increasingly unprofitable one. However, many banks are still issuing credit cards.
The Enterprise Early - Warning System shows that in 2025, the credit card issuance volumes of listed city and rural commercial banks such as Changsha Bank, Guiyang Bank, Suzhou Bank, and Qingdao Rural Commercial Bank all increased, with year - on - year increases of about 60,000, 70,000, 40,000, and 20,000 cards respectively.
With the decline in the outstanding balance and the pressure on the non - performing loan ratio, why do small and medium - sized banks still continue to issue credit cards?
An industry insider analyzed to a reporter from Times Weekly that in the overall financial business of banks, the deposit, loan, and retail businesses are highly homogeneous. For small and medium - sized banks, credit cards are one of the few retail products with the opportunity to be differentiated. However, credit cards highly depend on the large - scale personal retail business. If there isn't a sufficient user scale, the investment in systems, risk control, operations, and benefits is difficult to be spread out, and profitability is out of the question. Therefore, small and medium - sized banks are in a "dilemma".
Whether to keep or abandon the credit card business is not a simple choice.
Zeng Gang believes that since it's difficult for small and medium - sized banks to compete with state - owned and joint - stock banks in terms of scale, if they want to continue to keep the credit card business, the way out lies in "specialization and localization". For example, they can integrate credit cards into local life scenarios, focus on segmented customer groups, and rely on external platforms to lower their own investment threshold.
More importantly, they should shift from focusing on the "card" to the "customer". Zeng Gang believes that small and medium - sized banks can use credit cards as an entry point for retail customer acquisition and cross - selling, rather than an independent profit - making unit. They can make up for the thin profit of the credit card business itself through the comprehensive contributions of wealth management, deposits, etc., and avoid blind expansion.
Dong Zheng predicts that in the future, small and medium - sized banks may return to their roots and invest their limited resources in business areas with more local advantages, such as inclusive small and micro loans, agricultural - related loans, and community finance. The credit card business may adopt the strategy of "maintaining the existing customers, strictly controlling new customers, and gradually digesting the risks". Some banks may even completely divest or outsource their credit card business.
For Lin Ai, the rural commercial bank credit card still remains in her wallet. She hasn't cancelled it, but she rarely uses it.
On June 25th, Lin Ai logged into the credit card mini - program and saw a recently launched event: a 50 - yuan discount for a consumption of over 10,000 yuan.
"It's so useless. No one makes large - scale consumption every day," she said.
This article is from the WeChat public account “Times Weekly” (ID: timeweekly). Author: Lan Shuo. Republished by 36Kr with authorization.