Outstanding credit card balances went up 7.3% YoY in Q4 22
It indicates that consumers are reengaged to the market.
The outstanding credit card balances increased 7.3% year-on-year in the final quarter of 2022, TransUnion Consumer Pulse Study.
The growth was driven by reengaged consumers, “largely attributable to improved consumer sentiment and sustained momentum in consumption.”
TransUnion said Hong Kong consumers showed increased optimism in their household finances, with almost eight in 10 saying they expected their income to remain stable or increase in the following months.
“In Hong Kong, consumer sentiment seems to have remained unaffected by the current inflation and high interest rate environment,” said Kevin Chen, principal, Financial Services Research and Consulting at TransUnion Asia Pacific.
“This positive momentum in consumer sentiment is translating into growth in the major consumer credit products. Lenders need to capitalise on this growth trajectory by better serving consumers’ product preferences and needs as they reengage with the credit market,” added Chen.
Loans on card
Consumers with loans on card hold nearly double the number of cards than those without loans on card.
TransUnion said super prime consumers with loans on card held an average of 7.4 cards on wallet compared to 3.9 cards held by consumers.
Consumers who took out loans on card are mostly millennials and Gen Z. Data showed that Millennials accounted for 41.5% of originations in loans on card during the third quarter of 2022.
Gen Z borrowers made up 36.9% of new loans on card, compared to 34.7% during the same quarter of 2021.