Young Adults Offer Significant Potential for Growth for Hong Kong’s Credit Market – TransUnion Study

• Study found that 70% of young adults aged 21-25 held a credit card – with significant growth opportunities for lenders among the rest of this cohort
• 11% of consumers aged 26-30 held a personal loan, much higher than the 6% average for borrowers across all ages, revealing greater wallet diversity among this cohort
• Only 3% of young adult consumers returned to their first lender for subsequent products, indicating opportunities for lenders to build loyalty

Access to credit serves as a fundamental catalyst and pivotal tool for financial empowerment among Hong Kong’s younger consumers, facilitating everyday purchasing convenience and enabling significant life milestones such as home ownership. Despite this important role, persistent misconceptions regarding the credit behaviour of this younger demographic (aged 21-30) continue to create barriers to broader financial inclusion and choice.

TransUnion’s (NYSE:TU) new study, presented at its annual 2025 Hong Kong Financial Services Summit, set out to examine and address the common perceptions about young consumers, often negative, that persist in market. It showed that younger, credit eligible consumers offer significant opportunities for lenders, and that understanding the credit behaviours and preferences of these emerging consumers and empowering them with adequate access to credit can help lenders better service the needs of this increasingly credit-active generation.

The study, “Empowering Young Consumers’ Credit Lifecycle”, set out to understand the credit behaviours of consumers aged 21 to 30 years (young adults) 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.

“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.”

Perception: Younger consumers don’t value credit and are disengaged from the traditional credit market

Study findings: 84% of young adult consumers in Hong Kong agreed that credit access is important for achieving their financial goals, while 60% agreed that 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.

Credit Product Penetration Rate by Age Group

The table above shows that younger consumers 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. 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. As well, the lower participation among younger consumers for mortgages, while not surprising given affordability challenges, indicates further opportunities to expand access to home ownership.

Perception: Younger consumers generally don’t leverage credit responsibly

Study findings: Looking at credit card, which is the most popular credit product among the young adult consumers in Hong Kong, 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.

“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.”

Perception: Younger consumers have low appetite for new credit, with a lack of lender loyalty.

Study findings: 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.

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.

Perception: Younger consumers find it difficult to keep up with their credit obligations

Study findings: 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[1] 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.

These delinquency rates highlight the importance of financial education, targeted risk mitigation tools, and custom credit management strategies to these consumers who are relatively new in their credit journey.

“Our research clearly demonstrated that younger consumers in Hong Kong are a valuable and increasingly active segment within the Hong Kong credit market,” said 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 behaviors generally align with lenders' risk-based expectations.

“By adopting targeted approaches in credit education, wallet diversification, loyalty enhancement, risk optimisation, and proactive delinquency management, lenders can effectively engage younger consumers, supporting them through their financial journeys and securing long-term sustainable growth,” Sun said.

[1] TransUnion CreditVision® risk score: super prime = AA; prime plus = BB; prime = CC; near prime = DD to HH; subprime = II to JJ