New credit card users to drive lending growth

MANILA, Philippines — New-to-card consumers, or Filipinos opening their first-ever credit card accounts, are emerging as a crucial driver of inclusive and sustainable credit growth in the country, according to a new study by global information and insights firm TransUnion.

The study, presented during TransUnion’s inaugural Philippines Financial Services Summit, found that one in every two new credit cards opened in 2024 was issued to a first-time cardholder, signaling the importance of credit cards in promoting financial inclusion.

“Credit cards are more than payment tools; they represent the first step toward financial mobility, offering consumers access to additional liquidity and flexibility when needed,” Weihan Sun, TransUnion’s principal for research and consulting in Asia Pacific, said.

“Beyond enabling greater financial inclusion, they also provide an opportunity for lenders to build loyalty and trust through long-term relationships.”

Despite the Philippines’ growing digital finance ecosystem, with 80 million Filipinos using e-wallets and 65 percent having access to formal financial services in 2025, only one in 20 consumers held a credit card. This suggests that millions remain credit invisible, lacking access to traditional credit products that allow them to build a financial footprint.

In 2023, TransUnion found that 88 percent of first-time cardholders began their credit journey with a credit card, making it the most common entry point for new borrowers. As e-commerce continues to expand, credit cards are expected to become an even more popular mode of payment for big-ticket purchases.

About 1.46 million Filipinos became new-to-card consumers in 2024, accounting for half of all new credit card originations that year. Nearly 57 percent of these borrowers were under the age of 35, underscoring the role of young, digitally savvy Filipinos in driving credit adoption. Women made up 56 percent of first-time cardholders, a slightly higher share than their proportion in the adult population.

While these consumers generally start with smaller credit lines due to limited history, they tend to use their cards responsibly. TransUnion said new-to-card borrowers had an average credit utilization rate of 28.8 percent, comparable to the 27.9 percent among established cardholders.

However, Sun cautioned that payment performance remains a concern. “New-to-card consumers present a strong opportunity for lenders, as they tend to be younger and demonstrate a clear willingness to use credit,” he said.

“But given their higher likelihood of early-stage delinquencies, lenders should invest in proactive engagement and education initiatives to help them build responsible credit habits.”

The study showed that 28.2 percent of near-prime new-to-card borrowers were 30 days past due within a year, compared with an industry average of 13.5 to 15.3 percent.

TransUnion’s data also showed that new-to-card borrowers tend to expand their credit portfolios as they gain experience. Within six months of getting their first card, 9.5 percent of these borrowers opened an additional credit product such as another credit card (67 percent), a personal loan (27 percent) or an auto or home loan.

Nearly half of new borrowers remained loyal to their original lender when opening a second product, though loyalty declined for secured loans. Sun noted that this reflects an opportunity for financial institutions to “build lifelong relationships through closer monitoring of shifting consumer needs, customized solutions and education initiatives.”

TransUnion emphasized that sustainable credit growth will depend on balancing inclusion with responsible lending. New cardholders were typically assigned smaller credit lines with 71 percent receiving limits below P50,000, compared to 31 percent among established users. Yet their balances grew steadily over time.

After six months, new cardholders had average balances of P25,280, compared with P55,497 for established users. Despite smaller limits, they used a slightly higher proportion of their available credit at 37 percent, versus 32 percent for experienced borrowers.

Source: Philstar Global