Credit card defaults surge across China as older borrowers struggle to repay debt

China is facing a surge in credit card delinquencies from a seemingly unlikely source: middle-aged borrowers who otherwise look like model citizens, with university educations and secure public-sector jobs.

Chinese banks once rushed to lend to this group, confident they would easily be able to pay their bills. But defaults are now rising so quickly amid an economic slowdown that lenders are ramping up efforts to dispose of their non-performing loan portfolios.

The past quarter saw a roughly 50% jump in the value of non-performing loans registered on the Banking Credit Assets Registration and Circulation Centre – China’s official platform where banks and consumer finance firms list and trade non-performing debt portfolios.

The value of newly registered bad-loan portfolios reached 148.1 billion yuan ($22.2 billion) in the third quarter of 2026, including principal and interest. Credit card arrears accounted for 35.2% of that volume, making it the largest single category.

In October alone, 82 new portfolios had been listed on the platform as of Thursday. Most lenders said the average age of the delinquent cardholders was between 40 and 50. Others, such as Ping An Bank, simply described the borrowers as “middle-aged”.

Analysts and banking industry insiders say the figures are part of a growing trend, with middle-aged cardholders carrying the highest credit risks. The situation stands in stark contrast to the United States, where credit card defaults have long been associated with young people.

According to a February report by the Federal Reserve Bank of New York, borrowers aged 20 to 39 continued to show higher serious delinquency transition rates than older cohorts in the final quarter of 2025. Key drivers included higher credit usage and thinner cash buffers.

Dong Zheng, an independent analyst with decades of experience in China’s credit card sector, says the China-US divergence is partly driven by a simple demographic reality: middle-aged people form the core base of credit card users in China, while younger borrowers now tend to favour online lending services.

“And when economic momentum fades, those in their 40s become one of the vulnerable groups,” he said. “They typically carry housing mortgages and face obligations to support their families and raise children.”

According to a manager overseeing credit card operations at the Shanghai branch of a Chinese state-owned bank, most delinquent cardholders pointed to steep salary cuts or lay-offs during debt collection.

“When that happens, they want to hold onto their homes,” said the person, who spoke on condition of anonymity as he was not authorised to comment publicly. “So they prioritise mortgage repayments and family expenses. Overdue credit card bills only hurt their credit profiles, with little tangible immediate impact.”

The profile of the debtors is often a surprise, the person added.

“We are seeing a growing number of delinquent cardholders who hold what look like stable, even decent jobs from an outside perspective – for example, at Shanghai government-owned enterprises or government departments,” he said.

The details disclosed in several lenders’ bad-loan portfolios paint a similar picture.

In August, Beijing-based China Everbright Bank listed a non-performing loan portfolio worth more than 10 billion yuan, noting that it had “a high share of borrowers holding college diplomas or above”.

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Jiangsu Lishui Rural Commercial Bank, another lender from eastern China, described the debtors in its portfolio as having “strong professional capabilities”, which meant their repayment potential was “relatively high”.

Dong, the independent analyst, said many of the industry’s current issues stemmed from China’s boom in credit card usage in the mid-2010s.

Back then, lenders set very low application thresholds to rapidly grow their customer bases, especially for applicants working at government agencies or state-owned enterprises, according to Dong.

The banking industry source echoed this view. “Banks have an inherent trust in these borrowers and treat them as high-quality clients,” he said. “With far laxer background checks, the risks were sown years ago.”

Against this backdrop, Chinese lenders are now racing to offload non-performing loans. In the first nine months of this year, portfolios worth a total of 322.2 billion yuan were registered on the Banking Credit Assets Registration and Circulation Centre, up 26.4% year on year.

Looking ahead, observers expect credit card bad-loan ratios to stay elevated.

Analyst Liao Zhiming at Wuhan-based Huayuan Securities noted that mounting bad loans paired with tougher regulatory requirements had prompted more Chinese lenders to tighten new credit card issuance.

“Even so, the ratio will remain high because of lenient approval standards in earlier years,” Liao said.

“At its core, this is a social issue now. When residents face risks to their incomes or jobs, default rates are naturally bound to climb.”