Reasons for Credit Card Market Shrinkage Named

The credit card market is shrinking and, like a hut on chicken legs, is turning its back on the consumer. There are more and more manifestations of unfriendliness - obvious and veiled. In particular, banks are cutting the size of credit limits for their most loyal and conscientious clients, those who have not missed mandatory monthly payments for years. And they are reducing the number of new cards issued: in April, it decreased by 54% year-on-year compared to the April 2024 figure.

In April, banks opened 1.11 million credit card agreements for Russians with a total limit of 139.42 billion rubles. While in the same month last year - 2.43 million for a total of 288.85 billion rubles, according to data from the United Credit Bureau (UCB). Thus, the total volume of approved limits decreased by 52%. Compared to March (that is, in just one month), the number of issues and the total limit on cards decreased by 6%, which indicates a fairly high rate of what is happening.

"In total, 4.64 million credit cards were issued in the first four months of 2025, with a total limit of 566.53 billion rubles and an average card limit of 122 thousand rubles. Compared to the same period last year, the number of issues decreased by 50%, the total volume of limits - by 43%," the OKB materials note.

Meanwhile, from 2020 until the middle of last year, bankers recorded a steady growth in indicators. A turn in the dynamics was outlined after July 1, 2024, when the Bank of Russia prohibited banks from issuing credit cards to borrowers with a debt burden ratio (DBR) of more than 80%. And this was only one of the regulatory tightenings: additional pressure on the market (primarily on bank capital and the profitability of credit products) was exerted by the Central Bank's increase in risk ratio premiums since July.

Even earlier, around March 2024, the tried-and-true strategy of “borrow for 60-120 days – repay without overpayment” began to falter. According to employees of several Russian banks who wished to remain anonymous, the organizations began to do two things (often unilaterally) - cut credit card limits by 10-30% and shorten the grace period (the grace period for paying interest on a loan; for example, from 100 days to 92).

The paradox is that if earlier banks took such measures infrequently and mainly against malicious defaulters, today their target is quite conscientious clients, of whom there is an absolute majority. The paradox, however, is quite understandable: those who do not allow delays in mandatory payments do not bring profit. It turns out that this model is not profitable for credit institutions.

"Of course, banks don't like it when their money is used, essentially, for free," says Alexey Zubets, director of the Center for Social Economics Research. "That's why they are cutting card limits and the number of loans issued. The grace period scheme no longer suits them. Moreover, the practice has become widespread when a person withdraws the entire amount from a credit card, places it on a deposit for an interest-free period (usually three months) at 20% per annum, and ends up with a 5% yield. It's probably bad: the money is basically out of thin air, no personal investment is required."

Another thing is that when products with grace periods first appeared, the cost of funds for banks was insignificant. Today, everything is different: with the Central Bank rate at 21%, this is negative marginality for them, “money taken out”. Unfortunately, there are frequent cases when banks change the terms of credit cards unilaterally, without notifying or informing clients with whom they have an agreement. This is both ugly and illegal. Apparently, Zubets sums up, today, in conditions of economic stress and uncertainty, the credit card market is doomed to stagnation. It is not in the banks’ interests to develop and improve it. The situation can change only with a low key rate. But it will take years until the rate drops to 4-5%.

"There is reason to believe that banks are reviewing their strategy due to the relatively low marginality of credit cards compared to consumer loans," says BitRiver financial analyst Vladislav Antonov. "Cards imply short-term use and less income stability for banks. Especially in the context of high key rates, which increase the cost of attracted resources. In addition, banks have tightened requirements for customer solvency in order to minimize risks, which automatically reduces the circle of potential borrowers."

For consumers, this trend creates several problems. First, the deterioration of access to cards does not allow for quick access to funds in emergency cases, such as treatment or unexpected expenses. Second, even customers with a good credit history suffer, especially in regions where the average limit is lower than in large cities. As for the market outlook, the general trend towards a decrease in demand remains: the population is becoming more cautious in using borrowed funds due to increased financial literacy and high rates, making loans less profitable. In Antonov's opinion, in the future, the credit card market may narrow to niche products aimed at premium segments or specific needs.