Survey: Over 80% of HK young adults believe credit access crucial in achieving financial goals

Over 80% of young adult consumers in Hong Kong believed that credit access is important for achieving their financial goals, while over half of them agreed that credit would give them access to new opportunities that could lead to a better quality of life, according to a TransUnion study. 

The study, “Empowering Young Consumers’ Credit Lifecycle”, set out to understand the credit behaviours of consumers aged 21 to 30 years and to provide clear, evidence-based insights for lenders, while empowering these consumers with more credit opportunities. The study assessed credit participation and engagement patterns against industry benchmarks of consumers across all ages. This research drew on TransUnion Hong Kong’s Consumer Credit Database to examine borrowers across three cohorts (starting June 2022, 2023 and 2024), with supplementary context from its Consumer Pulse Study for Q4 2024.

The study revealed that 84% of young adult consumers in Hong Kong said credit access is crucial for achieving their financial goals, while 60% said credit would give them access to new opportunities that could lead to a better quality of life, which is a strong indication that younger borrowers understand the importance and relevance of credit access.

Over 70% of young consumers aged between 21 and 30 actively participated in the credit market over the study period, with the percentage of younger consumers holding unsecured products (credit cards, personal loans and revolving lines), exceeding overall industry averages in all products except personal loans for the 21-25 age tier, according to the survey. 

However, the fact that 10% or less of younger consumers held a credit product other than a credit card indicated opportunities for lenders to grow their portfolios by introducing other credit products to these consumers. Also, the lower participation among younger consumers for mortgages, while not surprising given affordability challenges, indicates further opportunities to expand access to home ownership.

In terms of credit cards, the data showed that while credit lines increased with age across all risk tiers, utilisation rates remained steady as consumers aged. With higher line access, average balances increased with age, indicating that growing consumption needs and greater credit access were met with responsible borrowing.

On the other hand, only one in three young adult consumers made any new credit enquiries in a six-month period over 2022 and 2023, with only one in four originating a new credit product over that time, showing that these consumers had a low level of interest in applying for new credit, said the report. 

Credit cards were the most popular new product among young adults during the study period, with 20% of 21-year-olds originating a new credit card over this period, up to 23% of 25-year-olds opening a card and the same for 30-year-olds. In contrast, fewer than 5% of younger consumers opened a new personal loan, mortgage or revolving line in the period under study.

However, when the time came to apply for an additional credit product, just 3% of young adult borrowers returned to their first lender for a new credit product. This highlights an opportunity for lenders to bolster their approaches to building customer loyalty, and also suggests that cross-selling strategies may support wallet expansion, especially as consumers’ needs shift with age.

Higher delinquency rates among young adults indicated underperformance compared to consumers in other age groups, although Hong Kong delinquency rates, even for younger consumers, remain low in comparison with other global markets. Among 21-year old prime credit card holders, 1.5% of new accounts opened were at 30 days or more past due after 12 months on book. Defaults were lower for slightly older age cohorts, with delinquencies for new accounts after 12 months among 25- and 26-year old prime consumers at 1%, on par with industry vintages for the prime segment.

"Enabling younger consumers with adequate credit access empowers them financially, allowing better management of everyday expenses and unforeseen financial obligations," said Weihan Sun, principal of research and consulting for Asia Pacific at TransUnion. "This empowerment is critical for promoting financial inclusivity and aiding these individuals in achieving important life milestones such as home ownership, studying abroad, or entrepreneurship."

"Credit utilisation and average balances were well aligned with risk-based access to credit, which grew with age as risk profiles as well as likely income levels improved,” said Sun. “This highlights responsible credit use and refutes the perception that younger consumers are less likely to handle credit responsibly."

“Our research clearly demonstrated that younger consumers in Hong Kong are a valuable and increasingly active segment within the Hong Kong credit market,” added Sun. “Contrary to perceptions, these consumers deeply value credit and actively engage with traditional credit products. They manage their financial commitments responsibly, and their credit behaviours generally align with lenders' risk-based expectations.

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