‘Gen Zs are active users of credit cards’

(From Pixabay)
(From Pixabay)

THE credit card market in the Philippines is poised for continued growth, driven by strong demand, particularly among younger consumers.

According to TransUnion Philippines, Gen Z Filipinos are driving the increase in credit card growth. Their share of overall originations has more than doubled in five years, rising from nine percent in the third quarter of 2019 to 22 percent in the third quarter of 2023.

Gen Zs are those born from 1997 to 2012 or those whose current ages range from 12 to 27 years old.TransUnion said Gen Zs’ share in credit card penetration will increase as they reach adulthood.

Gen Z Filipinos also comprised a greater share of the new-to-card segment of borrowers, making up one-third (33 percent) of all new-to-card borrowers in 2023.

New-to-card borrowers are those originating their first-ever credit card on file, according to TransUnion Philippines’ data.

Ninety-eight percent of Gen Z Filipinos see access to credit and lending products as important to achieving their financial goals, according to the first quarter 2024 Philippines Consumer Pulse Study. They consistently keep an eye on their credit status to find the best credit offers accessible to them.

“This generation places a higher importance on accessing credit and lending products to achieve their financial goals. As more Gen Z consumers reach adulthood, we expect their share of the credit market to continue increasing,” said Weihan Sun, principal of Research and Consulting for Asia Pacific at TransUnion, in a statement.

Total outstanding credit card volumes increased year-over-year from 9.3 million cards in the fourth quarter of 2022 to 11.2 million cards in the fourth quarter of 2023. Over the same period, the credit card penetration rate, meaning the percentage of adults holding at least one credit card, reached over 15 percent of Filipino adults. These trends represent a growth of around 20 percent in both overall volume and penetration rate in the last year.

This is consistent with the data from the Credit Card Association of the Philippines, which showed that credit card spending increased by 39 percent to reach P853 billion in the first half of 2023 – a jump from the 29 percent increase in the previous year. TransUnion said the trends in card originations, total volume, penetration and spending all indicate a promising growth trajectory for the credit card market in the country. / KOC

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