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Almost 90 per cent of Hong Kong credit card holders pay their bills on time, exercising a high level of debt avoidance discipline that belies the fact that most own on average four credit cards.
Hong Kong cardholders rank higher than those in the US, Australia, and Singapore when it comes to keeping up with monthly payments, according to market research company J. D. Power, which polled almost 2,900 Hongkongers.
86 per cent of Hongkongers kept up payments, while only 57 per cent of US citizens managed to do the same. Australia trailed the US by one per cent, while Singapore came second on the list at 80 per cent.
“The research on the one hand suggests that Hongkongers are more prudent [than cardholders in the other markets], and tend less to use credit cards to get into debt,” said J.D. Power’s director Dr Gordon Shields. “But it also reflects how interest rates are prohibitively high in Hong Kong [detering Hongkongers from borrowing on credit cards].”
Hongkongers tend to take up credit cards more for the benefits and discounts they offer than in order to borrow money, which would explain why many do not fall behind on payments, he added.
City University economist Dr Li Kui Wai said that difference in approaches to handling credit card bills reflected diverging attitudes towards debt in the West and in the East.
“Most Asian countries in general do not want much debt – the idea of debt in society is very shameful,” he said, explaining why American credit card holders may feel less compelled to pay their bills on time than Hongkongers or Singaporeans.
But while Hongkongers did appear more prudent when it came to paying on time, they were less likely to read the fine print, with nine out of 10 cardholders professing not to fully understand the terms of their rewards programmes.
Shields suggested that this reflected a failure on the part of credit card issuers to communicate effectively, with customer satisfaction among Hongkongers towards them being notably low.
Describing the market as unusually “polarised”, with American Express on top and its competitors DBS and HSBC lagging limply behind, he suggested that complacency might be to blame for the failures of credit card issuers to differentiate themselves from one another and to strive to provide good customer service.