Is the credit card cold？

　　Author: Wang Baohui

　　Recently, the topic of young people’s reluctance to use credit cards has been hotly searched. Credit card business has always been an important position of bank retail finance, which plays an important role in stimulating consumption willingness, releasing consumption potential and promoting consumption upgrading. Is it that credit cards are "cold" after entering winter?

　　Xu Zewei, Party Secretary and President of Beijing Internet Finance Industry Association, said that the attractiveness of credit cards has weakened, which is mainly affected by factors such as the progress of Internet technology and changes in the market environment. With the rapid development of mobile payment, many young people are no longer used to carrying cash and physical bank cards with them.

　　Although credit cards have the advantages of paying in advance and paying later, with the development of financial technology, many Internet platform apps have also launched some services similar to credit card functions, which has a certain impact on the credit card market. In addition, online consumption scenarios are increasing, and the substitution effect of mobile payment tools on credit cards is obvious. In addition, mobile payment tools have no annual fees, management fees and other expenses, and they are flexible and convenient to use, which is very popular among young users.

　　In addition to the change in payment methods, the "coldness" of credit cards also means that some young users’ consumption concepts are changing. Statistics show that today, 35% of young people do not use credit consumption, and most of the credit consumption accounts for less than 20% of their income. More and more young people are trying to bid farewell to "ahead of consumption" by closing consumer credit.

　　In addition, problems such as declining service quality and opaque rates are common reasons for credit card complaints. For example, some credit card products do not fully disclose the relevant fees when they are promoted, or there are unclear charging items in the bills, which affects the experience of young customers and reduces the user’s stickiness.

　　In fact, the "cold weather" of credit cards does not mean that the credit card track is unpopular. Chen Xu, a senior analyst at Tianyancha Data Research Institute, said that credit cards have obvious advantages in terms of credit limit and installment payment. Cardholders can not only enjoy the preferential treatment of special merchants, but also effectively accumulate personal credit, which is convenient for handling businesses such as credit loans.

　　The data shows that the cumulative number of credit cards issued in China increased from 432 million in 2015 to 786 million at the end of the second quarter of 2023, and the total credit amount increased from 7.08 trillion yuan in 2015 to 22.31 trillion yuan at the end of the second quarter of 2023. The credit card business has deeply penetrated into people’s modern consumption life.

　　With the growth rate of credit card issuance and transaction volume of various banks generally slowing down, more and more credit card businesses have also turned to the development model of "reducing costs and increasing efficiency". Previously, a number of banks announced that they would adjust the rights and interests of some of their credit cards from 2024. In particular, many commercial banks continued to exert their efforts in increasing fees and benefits and improving the rights and interests of using cards.

　　While the credit card is "cold", it is also forcing commercial banks to carry out the reform of stock credit card business and reasonably balance the relationship between retaining customers and expanding customers. Du Yang, a researcher at China Bank Research Institute, said that under the background of stricter supervision, the credit card business needs to move from the extensive development stage of "staking the land" to the professional, fine and high-quality development stage. On the whole, on the one hand, banks should pay attention to digital construction, risk management and brand building, constantly expand market share and develop more potential users; On the other hand, it is necessary to strengthen credit card compliance management, protect the legitimate rights and interests of financial consumers, and enhance brand influence and customer stickiness.

　　"Credit card business is a relatively mature consumer finance model, which can provide cardholders with reliable and convenient consumer financial services, meet the diverse consumer needs of residents, and then consolidate the basic role of consumption in economic recovery." Du Yang said that China’s commercial banks continue to strengthen the transformation and upgrading in product systems, service capabilities and risk management, and promote the rapid development of credit card business to meet the diverse consumer needs of users. (Wang Baohui)