Credit data insights provider TransUnion sees a spike in credit card use in the coming holidays, as demand for credit continues to scale up.
Recent data generated by the company showed an 89-percent increase in demand for credit year-on-year, from the second quarter of 2022 to the second quarter of 2023.
“The good news is this is further expanding. Inherently, there is a market role play here because of the ‘Ber’ season. Obviously, we are seeing spikes, as well,” said TransUnion chief commercial officer Yogesh Daware in a briefing Tuesday.
TransUnion president and chief executive Pia Arellano said that while demand for credit products is on the rise, there is much need to educate users and potential clients on the benefits of credit and how “credit is not bad.”
She said it is time to correct the negative perception of credit which gives off a wrong connotation that credit is “utang” which is synonymous to financial irresponsibility.
TransUnion emphasized how responsible credit can open new doors of possibilities and opportunities to borrowers and improve one’s lifestyle.
The company said lenders should be able to break free from being risk averse to spread the benefits of financial inclusivity.
“From the supply side, our role is to influence our lender and our banks to actually learn to be less risk averse, lend to the ‘credit virgins’. Ultimately, by doing so, that will really drive financial inclusion. Our insights, our solutions allow them to get more informed decisions,” Arellano said.
The latest Credit Perception Report commissioned by TransUnion and conducted by True Global Intelligence found that about 3/4 of the surveyed respondents prefer cash transactions rather than credit because they can afford to pay the daily expenses and many are expecting an improvement in their financial status.
Despite this positive outlook many prefer traditional financial products like savings account and e-wallets due to the negative connotation about credit.
The study found out that Filipinos favor installment payments and personal loans more among credit products which believed to be risk takers.
The study also saw the need to streamline loan applications processes to be more accessible to potential borrowers.