Strong Spending Lifts Credit Card and Personal Loan Balances in Hong Kong’s Consumer Credit Market
- New credit card supply remained constrained, although credit quality stayed strong with delinquency rates broadly unchanged
- Revolving lines and loan-on-card continued to decline as fewer consumers held balances and originations slowed
- Credit performance remained resilient, with delinquency rates stable-to-improved across products
Hong Kong’s consumer credit market showed mixed trends in the first quarter of 2026 as credit cards and personal loans remained broadly stable, supported by healthy outstanding balance growth and steady repayment performance. However, revolving lines and loans on card continued to contract, reflecting more selective lender activity and softer demand in those segments.
These insights and others are shared in the TransUnion (NYSE: TRU) Hong Kong Industry Insights Report for Q1 2026, which also showed that credit delinquency trends remained largely stable or improved, suggesting prudent repayment behaviour among consumers, while lenders’ disciplined underwriting and portfolio management continued to support credit quality. This is in the context of a steady inflation rate, at 1.7% for February and March1, and a 5.9% GDP growth2 in the quarter – the strongest in nearly five years.
Credit Card Spend Remained Strong
Hong Kong’s credit card market remained stable, with outstanding balances and average balance per consumer increasing during the first quarter of the year, despite a decline in total card accounts. Outstanding card balances rose 4.9% year-over-year (YoY), and average balance per consumer increased 3.6% YoY, reflecting sustained spending momentum. The total number of card accounts declined by 2.1% YoY, due in part to the closure of dormant accounts, by lenders, which contributed to a 3.4% YoY decline in average total card credit limit per consumer.
Origination trends also improved; although new account volumes were slightly lower YoY, at -1.1% in Q4 20253, this was a slower rate of decline than was seen in previous quarters. The market saw a growing contribution from younger consumers as Gen Z4 accounted for nearly three in ten (29.4%) new card originations, up from 26.3% a year ago, indicating continued participation from this segment as labour market conditions improved.
From a risk perspective, credit card performance remained steady. Delinquency rates were broadly unchanged at the account and consumer level, while balance-level delinquency rose by only one basis point YoY to 0.23%.
“The credit card portfolio reflects a healthy balance of resilient spending and stable risk,” said Weihan Sun, senior director of research and consulting for Asia Pacific at TransUnion. “This was likely due to a surge in domestic demand, with private consumption estimated to have grown by around 5.0%5 YoY, supported by a calendar of government-backed ‘mega events’ as well as a steady return of live entertainment and conferences. Card issuers would benefit from ensuring that their account management programs are focused on maintaining or increasing their share of wallet to drive profitable balance sheet growth,” added Sun.
Personal Loans Growth Driven by Larger Loan Sizes Despite Softer Originations
New personal loan amounts increased 12.1% YoY during Q1 2026, supporting a 3.6% YoY growth in total outstanding balances, while total personal loan accounts rose 1.3% YoY. Average balance per consumer climbed 2.7%, and the number of consumers with an open personal loan account edged up 1.6%. These findings show that lenders are focused on enabling greater access in the personal loan market, led by improvements in performance trends.
Delinquencies declined at both account (down by two basis points to 0.84%) and consumer level (down by five basis points to 0.95%). Balance-level delinquency also improved by two basis points to 0.55%. Taken together, these findings show the personal loan segment experienced stable underlying demand, higher supply amounts and improving portfolio performance.
“The personal loans market was resilient during 2025, although originations slowed down by three percent during the last quarter of the year,” Sun said. “The market was largely resilient in terms of demand and supply throughout 2025 despite that slowdown in Q4, but demand further picked up again in the first quarter of 2026 when enquiries for new loans increased by 2.7% YoY. The growth in the number of consumers carrying a balance shows that there is still good engagement with this product. Lenders would benefit from identifying consumers who have the propensity to open personal loans by leveraging consumer trended attributes.”
Revolving Line Originations Contracted Sharply with Balances Declined
In contrast to the stable origination trends in credit card and personal loans, revolving line originations declined 40% YoY, continuing a trend seen throughout 2025 after some digital banks scaled back low-limit product offerings following elevated delinquencies. Originations increasingly were led by traditional lenders and money lenders, where line assignments tend to be larger. As a result, the average limit on newly originated accounts increased by 24.8% YoY.
The number of consumers carrying a revolving line balance decreased by 9.7% YoY, and outstanding balances decreased by 1.6% YoY. However, younger consumers continued to show interest in revolving credit, with Gen Z representing nearly one in three (32.9%) originations.
Account-level delinquencies improved by eight basis points to 0.44%, while consumer-level delinquencies improved by 13 basis points. These changes reflect both portfolio cleanup and a more cautious lending environment, which are likely to lead to a recovery in these products as volumes and limits become normalised.
“As outstanding balances continued to decline amid encouraging performance trends, the revolving line segment appears to be stabilising as lenders focus on more sustainable growth, including addressing consumer behaviour on high delinquency small facility products,” said Sun.
Loan on Card Originations Contracted and Balances Declined
Loan on card activity continued to moderate, extending a trend seen through much of 2025. Origination volumes declined by 28.3% YoY in Q4 2025 as some lenders reduced campaign activity. This pullback contributed to a 12.3% YoY decline in total loan on card accounts and a 5.6% YoY drop in outstanding balances in Q1 2026. The number of consumers with an active balance also declined 12.6%, reinforcing the view that both supply and demand softened in this segment.
At the same time, the consumers who continued to use the product utilised larger share of open lines. Average opening balances increased 11.7%, and the average balance per consumer rose 8.0%. This indicates that while fewer consumers were using loan on card, those who remained active were borrowing higher amounts and carrying larger balances.
“Hong Kong’s consumer credit market continued to show a measured and differentiated pattern across products during the first quarter of the year,” Sun said. “Resilient spending and balance growth in credit card and personal loans are helping support market stability, while moderated usage in revolving lines and loan on card reflects more selective activity rather than broad-based deterioration.”
Q1 2026 Metrics for Major Consumer Credit Products in Hong Kong
Credit product | Q4 2025 (i) originations – annual change | Outstanding balances – annual change | Account-level serious delinquency rates (ii) (iii) | Account-level serious delinquency – annual change (basis points) |
Credit card | -1.1% | 4.9% | 0.03% | 0 bps |
Personal loan | -3.0% | 3.6% | 0.84% | -2 bps |
Revolving line | -40.0% | -1.6% | 0.44% | -8 bps |
Loan on card | -28.3% | -5.6% | 0.01% | 0 bps |
i. Originations are viewed one quarter in arrears to account for reporting lag.
ii. Serious-delinquency rates are 90 or more days past due for credit cards and 60 or more days past due for all other credit products.
iii. Delinquency data are reported at an account-level up to 150 days past due, excludes 150+ days past due and charge-offs.
“These trends reflect that the Hong Kong financial services market is becoming more balanced rather than broadly expansionary,” said Sun. “For lenders, the priority in 2026 will be to capture growth in stronger segments while maintaining discipline in underwriting and portfolio management. The mix of improving domestic consumption and changing borrower behaviour is likely to reshape credit demand across both secured and unsecured products. In this environment, staying close to emerging opportunities and risks, while acting swiftly on data-driven insights and analytics, will be critical to navigating an increasingly nuanced landscape.”
