Summary of Key Points
In recent months, several banks (such as China Everbright Bank, Industrial and Commercial Bank of China, Agricultural Bank of China, and Shanghai Pudong Development Bank) have made concentrated adjustments to their credit card annual fee policies, focusing on high-end credit cards. Unlike the previous two years, which saw a reduction in benefits and an increase in the thresholds for fee waivers, these changes represent a structural optimization: lowering the annual fees for supplementary cards, simplifying the waiver rules, reducing the requirements for meeting consumption targets, and even introducing temporary discounts. The underlying logic is that the credit card industry is shifting from a focus on massively issuing new cards to retaining existing customers and nurturing them more carefully. In a market with limited growth potential, banks are placing greater emphasis on improving customer loyalty by optimizing annual fees, thereby encouraging users to continue using their cards rather than simply pursuing new customers.
1. Annual Fee Adjustments Are Not a One-Size-Fits-All Reduction; They Target Specific Pain Points
The fee adjustments are not a blanket reduction for all cards but aim to address specific issues:
- Reducing the cost of supplementary cards: For example, the annual fee for the supplementary card of China Everbright Bank's Classic Platinum Card has been lowered from 500 yuan to 300 yuan, and Agricultural Bank of China allows primary cardholders to issue their first supplementary card for free in the first year if certain consumption targets are met. This is designed to attract family customers and encourage them all to use the same bank’s cards, thereby increasing loyalty.
- Simplifying waiver rules: Previously, fee waivers required the calculation of points or returns, which was complicated. Now, fees are waived directly based on annual consumption (China Everbright Bank) or simply by making purchases or using installment plans (Industrial and Commercial Bank of China), providing a better user experience.
- Lowering the threshold for meeting targets: For instance, with Shanghai Pudong Development Bank's UnionPay Platinum Card, customers can now have their fees waived if they meet certain annual consumption requirements, rather than relying on point exchanges. Some Gold and Premium cards have also relaxed the number of transactions required. The goal is to encourage more card usage and increase customer activity.
These adjustments are not about losing money by selling cards at a discount but about providing targeted benefits to customers who are willing to continue using their cards.
2. The Shift from a “Card Issuance War” to a “Customer Retention War”
Why have banks suddenly become more lenient? Because the credit card market has entered a stagnant growth phase:
- Data from the central bank shows that there were only 687 million credit cards in use nationwide in the first quarter of 2026, 120 million fewer than at its peak—card issuance has reached a ceiling.
- Ordinary people typically use only 2-3 credit cards, and there are a limited number of high-value customers (those who frequently make purchases, use installment plans, or invest in financial products), making them highly sought after by banks.
- A representative from a state-owned bank stated: “In the past, credit card departments were very aggressive; now, we have to actively seek to retain customers.” High-end credit cards are not just tools for making transactions but also serve as gateways to offer financial services and private banking products. Therefore, optimizing annual fees is a way to keep these customers from switching to other banks.
3. Different Banks Have Different Strategies for Retaining Customers
Each bank’s adjustments target different customer groups:
- China Everbright Bank: Offers comprehensive optimizations, from high-end Platinum cards to Gold and Premium cards, with reduced fees for supplementary cards and simplified rules, making it easier for more customers to avoid annual fees.
- Industrial and Commercial Bank of China: Provides temporary discounts (from September to August next year), waiving the first-year fee for new customers and requiring only minimal card usage or installment payments in the following year to attract new users while encouraging existing ones to use their cards more.
- Agricultural Bank of China: Focuses on family customers, offering free first-year fees for supplementary cards issued to family members, thereby increasing the overall frequency of card usage within the family.
- Shanghai Pudong Development Bank: Evaluates customers based on their “comprehensive contributions,” changing the fee waiver method from point exchanges to meeting annual consumption targets and offering discounts to customers with assets, thus encouraging both spending and bank deposits/investments.
4. Do Banks Lose Money by Lowering Annual Fees?
Some might wonder if reducing fees means less revenue. However, banks have a more strategic approach:
- Annual fees are not the main source of income; the real profits come from transaction fees (commissions from merchants), interest on installment payments, and comprehensive financial services (such as deposits and investments).
- Optimizing annual fees helps reduce the risk of customer churn, which is much cheaper than acquiring new customers. A representative from a state-owned bank noted that the cost-benefit ratio of retaining a existing customer is significantly higher than acquiring a new one.
- Expert Xue Hongyan pointed out that banks need to shift from focusing on single-card profitability to comprehensive profitability, using fee discounts to encourage more card usage and deposits, thereby covering costs through these additional sources of revenue.
5. What Lies Ahead?
The competition will no longer revolve around annual fees; instead, banks will focus on:
- Scenario-based ecosystems: Collaborating with companies like Meituan and Didi to provide convenient and exclusive benefits for cardholders (e.g., discounts on rides or free access to airport lounges).
- Digital and personalized operations: Recommending suitable benefits based on customers’ spending habits (e.g., offering travel insurance if they frequently travel or shopping discounts if they often shop online), as well as providing intelligent reminders about how to avoid annual fees, making customers feel that the bank understands their needs.
These are the long-term factors that will truly make customers loyal to a bank.
In summary, these annual fee adjustments signal a shift in the credit card industry from a focus on mass issuance to a emphasis on **quality services and customer retention*. For ordinary users, using cards will become more convenient, with more substantial discounts and services that better meet their needs. As long as you use your card regularly, it may be easier to avoid annual fees, and you can enjoy more tailored services.