MANILA, Philippines – Gen Z is stepping into the workforce with big dreams and even bigger financial goals, but they’re finding that access to credit isn’t always as easy as visiting the nearest bank. The young generation is driving demand for new credit products even as they face the greatest barriers to access.

According to TransUnion’s latest Q4 2024 Consumer Pulse Study, 68% of Gen Z respondents see credit as a must-have for achieving their financial goals. They’re showing markedly more interest in credit too compared to Millennials (51%), Gen X (46%), and even Baby Boomers (52%), who likely have more stable financial footing by now.

But despite its growing importance, many Filipinos — especially Gen Z — feel left out when it comes to credit access. While only 42% of consumers overall believe they have enough access to credit, that number drops to just 31% for Gen Z. A striking 34% of Gen Z respondents said that they feel underserved, the highest among all generations.

This sense of exclusion is amplified when you consider that just 15% of Filipino adults owned a credit card in 2023, according to a separate TransUnion study. For Gen Z, who often lack traditional credit histories, this creates a frustrating catch-22: they need credit to build credit, but existing systems make entry difficult. With 63% of Gen Z respondents planning to apply for new credit or refinance existing loans in the next year, the message is clear — they’re ready to participate in the financial system, but they need solutions that work for them.

What’s next in credit for 2025?

That said, credit isn’t one-size-fits-all. With more Filipinos planning their finances for 2025, what types of credit are they actually looking for?

According to the TransUnion study, personal loans lead the pack, with 50% of Filipinos planning to apply for one or refinance an existing loan within the next year. Next are buy now, pay later (BNPL) services, with 36% of respondents showing interest — a 2-point increase from the previous quarter. Credit cards also remain a popular choice, with 32% planning to apply for a new card. Notably, refinancing activity is on the rise, with 27% aiming to refinance personal loans, and 22% planning to increase credit limits on existing cards, showing that many are actively managing their financial obligations.

BNPL services, in particular, stand out as a fast-growing segment. These services offer users fixed payment schedules and often lower fees than traditional credit cards. 

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Atome’s popular PayLater Anywhere Card has carved out a unique niche in this space, focusing on everyday purchases like groceries and utility bills. According to Atome Philippines country manager Chris Quiros, the card is especially popular with “young professionals in the gig or freelance economy, or those just starting out in their career.” For many first-time borrowers, the card serves as an accessible entry point into formal credit systems.

Meanwhile, Home Credit caters to a different kind of BNPL shopper: those eyeing big-ticket items like gadgets and appliances. In 2023 alone, Filipinos purchased over P6 billion worth of iPhones through Home Credit, a staggering tenfold increase compared to the previous year. This translated to nearly 200,000 iPhones sold, primarily financed through Home Credit’s widely-used installment plans. At summer’s peak, Filipinos also bought more than 1,000 units of air conditioners every day through the BNPL service.

It seems credit card providers are also responding to changing consumer needs, stepping up to meet the demands of first-time borrowers highlighted in the TransUnion study. 

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Maya’s Landers Cashback Everywhere Card, for instance, is positioning itself as an ideal starter card for Filipinos looking to build their credit history. By simplifying the process with a fully digital application that only requires an active Landers membership and a verified Maya account, the digital bank claims it’s making credit more accessible for younger generations. And it seems to be working: Millennials make up over half of Maya’s cardholders, with Gen Zs accounting for another 15%.

Still, even with these new products, Gen Z remains underserved by traditional banks when it comes to credit, opening the door for innovative digital banks to step in. As banks race to roll out more creative offerings — covering everything from travel rewards to shopping perks — GoTyme has also teased what they call a “QR-based credit card” that could launch as early as 2025. Could this be the next big thing in inclusive, tech-driven finance? – Rappler.com

Finterest is Rappler’s series that demystifies the world of money and gives practical advice on managing your personal finances.

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