(Yicai) Oct. 13 -- Chinese commercial banks have updated the benefits offered to credit cardholders, either by removing some or by raising the thresholds for others, because of declining profitability.

China Minsheng Bank has increased the number of points required for credit cardholders to access airport transfer services, fast security screenings through commercially important person channels, and airport very important person lounges, and has imposed restrictions on how many times they can access airport VIP lounges.

Ping An Bank has canceled fast security screenings at domestic airports for two types of platinum cardholders, and Bank of Communications cut certain card-holder's fast-track airport security screening privilege. Meanwhile, China Guangfa Bank stopped offering two types of free travel insurance products.

Services such as airport VIP lounges, hotel privileges, and travel insurance are not resources lenders own, a banking industry insider told Yicai. Therefore, every time they are used, banks must settle procurement costs with third-party providers, the insider added.

The contraction of credit card benefits shows how banks are reallocating their limited benefits budgets and resources from low-contribution customers to more active, higher-quality cardholders, said Su Xiaorui, senior researcher at Suxi Research. This shift indicates a transformation from "competing for the number of issued cards" to "increasing the quality of individual customers," she explained.

Su made the comment because many cardholders use credit cards only as a payment tool and pay their bills on time, which means they do not generate interest income for banks, adding that continuously providing benefits to this type of customers only generates costs for banks.

The era of banks offering universal credit card benefits has come to an end, said Wang Pengbo, chief financial analyst at Broadcom Consulting. It has become increasingly difficult for lenders to sustain the provision of high-cost travel benefits, such as airport VIP lounge access, for all cardholders, he added.

In turn, cardholders should adjust their expectations regarding bank services and adapt to the industry's new trend of increasingly refined credit card operations, Wang pointed out.

Editors: Tang Shihua, Futura Costaglione