China’s credit card market has contracted for 14 consecutive quarters, with People’s Bank of China (PBOC) data showing the total number of cards in circulation dropped to 687 million in the first quarter of 2026, down 9 million from the preceding three months and more than 120 million below the sector’s peak of 807 million reached in September 2022.
The trend underscores mounting pressure on Chinese lenders as they face sustained sluggishness in consumer demand, along with a rise in non-performing loans. By the end of 2025, total credit card circulation had already fallen to 696 million, dropping below the 700 million mark and declining 31 million from 2024.
The spending data compounds the picture. Ten major listed banks reported combined credit card transactions of 18.79 trillion yuan, approximately $2.6 trillion, in 2025, a year-on-year decline of 10.39%. All ten recorded declines, with seven including the Industrial and Commercial Bank of China and Bank of China seeing drops of between 10 and 15%. Bank of China’s installment transaction volume fell 36.01% over the same period.
One regional bank reported a credit card default rate above 11%, while outstanding balances also fell at most institutions, reflecting households reducing reliance on revolving credit.
The industry has completely exited its expansion phase and entered a stage of deep stock competition and transformation, according to financial industry analysts. Major banks including China Minsheng Bank and Agricultural Bank of China have responded by issuing product discontinuation notices for co-branded and themed credit card lines, accelerating a retreat from the aggressive consumer lending strategies that characterised the previous decade.
A structural shift in how Chinese consumers access credit is also reshaping the landscape. More than 80% of new Huabei users in 2024 had never previously held a bank credit card, making the embedded digital platform their first exposure to consumer credit, a clear signal that online products are eroding banks’ share of the market. Platforms such as Huabei and JD Baitiao embed credit directly into purchase flows on Alibaba and JD.com respectively, offering a frictionless alternative to traditional card borrowing that appeals particularly to younger urban consumers.
The contraction reflects multiple overlapping pressures including property sector weakness, elevated youth unemployment, and a broader shift among Chinese households toward savings and essential expenditure over discretionary borrowing. Chinese authorities have attempted to stimulate domestic demand through interest rate reductions and consumer subsidies, but household confidence has remained below pre-pandemic levels.
The decline creates direct financial pressure on banks that built significant revenue streams around credit card interest, transaction fees and instalment products, forcing institutions to restructure their consumer credit models at a time when traditional corporate lending has also slowed.
