Credit is slowly shedding its bad reputation in the Philippines, but not everyone is convinced.
The latest TransUnion Credit Perception Index (CPI) 2025 shows Filipinos trust credit products more than ever, with a six-point jump in confidence compared to last year. Still, a lot of people remain skeptical. Nearly 1 in 4 Filipinos think credit cards are “risky,” and another 1 in 4 say personal loans come with too many requirements.
That mix of curiosity and caution explains why credit adoption hasn’t taken off as fast as many banks and FinTech companies hoped.
Why the fear lingers
For many Filipinos, borrowing money still comes with baggage. Here’s what keeps people from swiping a card or applying for a loan:
Debt stigma runs deep. Borrowing is often seen as a weakness — a sign you can’t live within your means. Parents and grandparents pass down the idea that “utang” is dangerous, and it sticks.
Too much paperwork. About 25% of Filipinos say applying for loans and credit cards feels like a mountain of requirements. For busy workers, the hassle alone can be a dealbreaker.
High interest rates. More than half of the population (59%) say expensive borrowing costs keep them away. Add annual fees and penalties, and the fear of falling into a debt trap becomes real.
Scams and fraud. Roughly 52% of Filipinos worry about getting scammed when they borrow. With digital fraud on the rise, it’s no surprise many are hesitant.
The result? Even as credit becomes more accessible, millions of Filipinos still sit on the sidelines.
The upside of credit — if used wisely
Here’s the part often overlooked: credit can actually be a financial ally. A credit card can help cover emergencies. Personal loans can fund education or healthcare. Newer options like Buy Now, Pay Later (BNPL) and mobile loans are giving consumers flexible ways to budget for purchases.
The problem isn’t the product itself — it’s how it’s understood and managed. Without financial literacy and transparency, credit looks like a trap. With the right tools, it becomes a stepping stone toward bigger opportunities.
What banks and FinTechs need to fix
If financial institutions want Filipinos to embrace credit, they need to tackle the fears head-on:
Make applications easier. Streamline processes, cut down paperwork, and speed up approvals. Convenience can win people over.
Be transparent. Drop the fine print. Show interest rates, fees, and repayment terms in plain language. Let people see the real cost.
Protect against scams. Stronger security, better fraud detection, and clear consumer protections are non-negotiable.
Invest in education. With most Filipinos learning about money from social media, there’s a huge gap for banks to fill with honest, practical financial education.
Why this matters for Filipino families
The CPI shows trust is improving — but fear is still real. That matters because credit, when used responsibly, can unlock financial mobility. It can help families weather emergencies, invest in their children’s future, or start small businesses.
For now, though, many Filipinos see more risk than reward. Until lenders prove they can deliver safety, transparency, and fairness, credit will remain something people talk about — but avoid.
The bottom line
Credit doesn’t have to be scary. But for Filipinos, the fear is rooted in real experiences: debt traps, complicated rules, and fraud.
One in four still see credit cards as risky, and one in four say personal loan requirements are too much.
The opportunity is clear: if banks and FinTechs can change these perceptions, they won’t just win more customers. They’ll help build a more financially confident Philippines.
