Why aren’t credit cards popular in China, the world's second largest economy?



Sean McDirmid, lived in Beijing, China (2007-2016)

As others have stated, China has leaped frog credit cards to mobile payments, something that has been difficult to take of in the west because they already have credit cards.

Now, there is something else: China was never able to handle credit cards very well. The banks, for example, would get ripped off a lot and so it would be difficult to acquire a credit card (especially if you are a foreigner without the backing of your company). For the same reason that personal checks never really existed in China, credit cards never became popular because the trust needed to use them effectively didn’t exist.



Not only that, but the rules are very different. Normally, when fraud occurs, the bank that issued the credit card would require the merchant to provide proof that the transaction was legit…the burden of proof is always on the merchant! However, in China, the burden of proof is on the card user instead, making credit cards much more dangerous to use. In fact, many businesses abroad will look for these credit cards (e.g. issued by ICBC) to take advantage of, meaning Chinese credit card users have become increasingly attractive targets of fraud given their bank’s policies.


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Chris Garcia, Executive Management (1990-present)

That credit cards are not popular is a myth. The issue arises when you consider that those most likely to use credit cards are those in first and second tier cities compromise a significant minority of the Chinese population.

Banks in Beijing aggressively push credit cards. Though difficult generally for expats, for Chinese citizens you can get approved as long as you have demonstrable employment / income / assets and no negative credit history. Almost everybody I know has at least two.

Many answers paint credit cards as obsolete due to a robust e-payment platform. It's true that AliPay and WeChat have permeated society, but people are forgetting that these e-payments, somewhere down the line, represent real cash. Where does this cash originate from? A large part comes from credit; people link their credit cards to the platform and the spend is charged to their credit card. WeChat and AliPay serve as merchant accounts and payment facilitators. AliPay has recognized the importance of linking credit accounts as payment sources and has started their own finance company, soon to be commercial bank, to extend personal credit.




At least one answer has falsely stated that there are no safeguards when using a Chinese credit card. First of all, any Chinese credit card used overseas has the same zero liability policy as US-issued credit cards, without exception. Further, for overseas payments the cardholder can avail of chargeback rights. For domestic use, China Merchants Bank and GuangFa Bank started issuing their cards with a zero liability policy and other major banks have picked up on that. Also, since the overwhelming vast majority use a PIN for card purchases, fraud is manageable



Megan Cox, Living in Shenzhen with my Chinese (Teochew) family

I'm pretty sure the Chinese skipped the credit card revolution and went straight to mobile payments.

However, some do have credit cards, and use them rotationally to move debt around.

Apart from the Chinese’ exceptional frugality, My best guess is also that restaurants and stores in China simply would not accept all the chargebacks and fees (~3% on each transaction in the US). Credit cards come with all kinds of bullshit, from the business’s perspective. Why not just get cash.. Immediately.. Via mobile payments?

I mean.. Go to any Chinatown in the US and you'll see signs everywhere that say “CASH ONLY NO CREDIT CARDS”

Although, my dinner companion says she has a credit card that she routinely uses and pays off to increase her credit score (like me!). She also works for PingAn Bank and helps people open credit cards all the time, so she may be a bit of an outlier.







Isaac Hsu, studied at Michigan State University

Lots of great answers already but I would like to add that there are many transactions the Chinese can do nowadays with mobile payment that’s simply too cumbersome or impossible with credit cards, such as:

Rent a bike that does not have a docking station. Pick up any parked bike on the sidewalk and park it anywhere when you’re done. No need to return it to a predetermined location with a dock station. Just scan the barcode on the bike and unlock.





Order food at a restaurant w/o the waiter. You and your friends can each order different dishes, at the same table, and then decide how to split the bill - all done on each person’s phone. Just scan the 3D barcode on the table.



Pay highway tolls



Buy snacks in a taxi (w/o the driver turning around.) This is really funny and creative In China, taxis are turning into mini 7-Elevens



Try that with your credit card!

Meanwhile, Umerica is investing in building WALLS… (sigh)




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