Why do nine out of ten Malaysians reject credit when facing rising expenses?

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Majority of Malaysians Prefer Adjusting Spending Over Using Credit During Financial Strain

A significant majority of Malaysians, specifically 89%, indicated they would adjust their spending habits rather than immediately resorting to credit when confronted with increasing expenses. This preference for avoiding debt is further underscored by the fact that only a small fraction, 4.0%, would opt for Buy Now, Pay Later (BNPL) services as their initial solution, and an even smaller 2.3% would turn to credit cards first. These findings emerge from a survey conducted by Rakuten Insight between March 16-18, 2026, which polled 1,042 Malaysian respondents.
Emphasis on Prudent Financial Management and Debt Aversion

The strong inclination to modify spending before utilising credit suggests a deeply ingrained caution regarding debt among the Malaysian population. Instead of immediately seeking external financing, respondents are more likely to employ a range of self-directed financial strategies. These include cutting back on discretionary spending, which was cited by 46.9% of participants, and actively pursuing additional income streams, as stated by 16.7%. Furthermore, 15.3% of respondents indicated they would postpone significant purchases, and 10.2% would tap into their existing savings as their primary coping mechanisms.
Generational Differences in Credit Usage Under Stress

While the overall trend points towards avoiding credit, there are nuanced generational differences in how financial pressure is managed. Contrary to what might be expected, the youngest demographic (18-24 years old) does not exhibit the highest reliance on BNPL services under stress. Instead, the 35-44 age group, a demographic more likely to be managing substantial financial commitments such as mortgages and car loans, showed a higher propensity for using BNPL at 6.6%. For individuals earning RM10,000 or more per month, the uptake of BNPL services during times of financial stress dropped to zero, indicating that higher income brackets also prioritise avoiding immediate credit obligations.
Value and Proactive Management Drive Consumer Choices

When financial resources are constrained, the decision-making process for consumers shifts fundamentally, prioritising value over convenience. The survey results show that "lowest price" (60.1%) and "promotions and cashback" (43.6%) are the most influential factors in brand selection during such periods. Conversely, "convenience and speed" ranked lowest at 12.7%. This indicates that consumers are making calculated decisions, aiming to maximise their purchasing power and avoid costly errors, rather than seeking immediate gratification or ease of transaction. This proactive approach to managing affordability, described as "managed affordability," involves multiple simultaneous actions, with consumers actively adjusting budgets, timing purchases, monitoring expenses, and seeking supplementary income.

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Why do nine out of ten Malaysians reject credit when facing rising expenses?

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