According to data from the 2024 annual performance reports of publicly listed banks in China, several banks have experienced declines in key credit card metrics such as active user accounts, number of cards in circulation, and monthly active users on credit card apps.
Meanwhile, consumer loans have emerged as the new favorite within banks’ retail lending portfolios. Compared to credit card services, consumer loans carry lower operating and customer maintenance costs.
Recently, China’s National Financial Regulatory Administration issued a notice titled “On Developing Consumer Finance to Boost Consumption.” The notice raised loan caps for well-qualified borrowers:
- The personal consumption loan limit temporarily increased from 300,000 yuan (US$ 41,000) to 500,000 yuan.
- The internet-based personal loan limit was raised from 200,000 yuan to 300,000 yuan.
Several major banks quickly followed suit:
- China Construction Bank increased the limit for its consumer loan product, raising the ceiling of its “Kuai Dai” service from 200,000 to 300,000 yuan.
- China Merchants Bank extended the repayment term of its “Flash Loan” product to 7 years.
- Industrial and Commercial Bank of China now offers up to 1 million yuan through its “Rong e Jie” loan, with terms of up to 5 years.
In addition, many banks have launched a new wave of interest rate “price wars” in consumer loans, with rates dropping below 2.6 percent and even 2.5 percent.
This strategic shift is already producing clear results. For instance, in 2024, the Bank of Communications reported a credit card loan increase of 48.679 billion yuan, or 9.94 percent on a year-on-year comparison. At the same time, its personal consumer loans surged by 156.837 billion yuan, marking a 90.44 percent growth from the previous year.
Source: Xinhua, March 27, 2025
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