Chinese Banks Shut Credit Card Centers Amid Market Shifts

An increasing number of Chinese financial institutions are scaling back their credit card operations, shifting away from a decade of aggressive growth, primarily due to changing market conditions.

Since the start of last year, over sixty credit card centers have closed across China, based on partial data. The latest closure involved the Bank of Guangzhou’s center in Zhongshan, which is their second to shut this year.

The total number of credit and hybrid cards issued by Chinese banks also declined, falling to 707 million in the third quarter of the previous year from a peak of 807 million in the third quarter of 2022, according to data from the country’s central bank. Additionally, many banks have begun discontinuing their dedicated credit card apps and shifting functionalities to their all-purpose banking applications.

“Reducing credit card centers is a natural part of the banking industry’s evolution,” said a senior credit card analyst.

He explained that with the widespread adoption of mobile internet, traditional offline strategies for promoting credit cards are becoming less effective. The credit card market has become saturated, making it increasingly difficult to justify the extensive human resource investments in many of these centers.

The industry isn’t vanishing but entering a new phase of development. Banks are integrating functions formerly managed at dedicated centers into their local branches to lower operational costs, the analyst noted.

Foreseeing more closures of credit card centers, he clarified that this doesn’t signal a downturn for the industry. Instead, it signifies a fundamental restructuring of how credit products are managed and delivered.

Looking ahead, the focus for credit card growth is expected to shift toward better customer management, enhancing digital capabilities, and expanding the merchant network, he added.