Recently, home renovations have significantly increased our daily expenses. We typically use credit cards and pay them off within the billing cycle. Although we have sufficient cash on hand, we prefer to keep it in money market funds for extra interest income. At the same time, to ensure financial stability, we’ve set up automatic payments to promptly repay credit card bills upon due date.

Bank status: Deposits increasing, loans decreasing

Amidst growing economic uncertainty, people are more inclined to save rather than consume or invest. This leads to increased bank deposits but also requires banks to pay higher interest rates. Conversely, reduced consumption and investment activity lowers loan demand, making it difficult for banks to generate income through lending.

To attract and retain customers, banks are compelled to offer more competitive deposit rates, further compressing their net interest margins. Simultaneously, to stimulate economic growth and consumption, the central bank may implement policies to lower benchmark interest rates, which will also affect loan rates and subsequently impact bank profitability.

Bank marketing strategies: Cultivating user habits

Repayment is approaching soon. First, Bank of Communications offered me a one-year interest-free installment plan. Shortly after, China Merchants Bank provided a 2.5% discount on installment interest, resulting in an annual rate of just 1.9%. Faced with these offers, I chose to accept the installment services from both banks.

Banks are truly investing heavily to cultivate user habits. According to the definition of a bank’s revenue stream, I should be considered a valuable client. Given the current difficulty in lending, banks are essentially preparing for potential future financial difficulties on my part by fostering my installment mindset—allowing them to earn more interest income when that time comes. After all, credit card interest rates are well-known to be high.

…and laid the groundwork for future profits

The importance of personal financial management

While bank installment offers may seem appealing, users should recognize the risks of over-relying on credit card installments. We should carefully consider our repayment ability and future financial needs to avoid falling into long-term debt for short-term convenience. Key to personal finance management is balancing current needs with future planning.

Please provide the Chinese text you want me to translate. I am ready when you are.