Weak consumer spending and a crackdown on inactive accounts have led to a plunge in the number of credit cards in China, further eating into profitability of the country’s struggling banking sector.

During the first quarter of 2026, the number of credit cards owned by Chinese consumers dropped to 687 million, 9 million less than the preceding three months, the People’s Bank of China (PBOC) said in a report on payment earlier this month.

Since the number of accounts peaked at 807 million in September 2022, it has fallen about 15 per cent during a 14-straight-quarter decline.

The trend underscores mounting pressure on Chinese lenders as they face sustained sluggishness in consumer demand, along with a rise in non-performing loans, analysts said.

Dong Zheng, an independent analyst who has been monitoring mainland Chinese banks’ credit card businesses for 26 years, said that in terms of transaction value, the mainland’s 12 major listed banks reported an average 11 per cent year-on-year slide on consumers’ purchases of goods and services via their credit cards in 2025, showing retail spending was turning weaker amid a slowing economy.

Transaction value generated by credit cards at the 12 listed banks hit an average 1.9 trillion yuan (US$279.3 billion) in 2025, Dong added.

“Consumption willingness is still weak. Obviously, a sluggish property market has weighed on Chinese consumers,” he said. “Since millions of families have witnessed a great drop in value of their housing units, they became more cautious on retail spending.”