Card Spending Increased by 6.8% Last Month... "Temporary Effect of Disaster Relief Funds"

Recovered to Pre-COVID-19 Levels in Three Months

[Asia Economy Reporter Ki Ha-young] Last month, card spending recovered to pre-COVID-19 levels for the first time in three months. This is attributed to a temporary boost from the government's emergency disaster relief funds.

According to the Credit Finance Association on the 27th, the total card (credit, debit, and prepaid cards) approval amount last month was 78.1 trillion KRW, a 6.8% increase compared to the previous year. The declining trend seen in March and April, with -4.3% and -5.6% respectively due to the impact of COVID-19, has turned into an upward trend.

Personal card approval amounts showed the largest increase, rising 7.7% year-on-year to 65.2 trillion KRW. Corporate card approval amounts slightly increased by 1.7% year-on-year to 12.8 trillion KRW. Credit card approval amounts rose 3.8% year-on-year to 59 trillion KRW, while debit cards increased 4.4% to 17 trillion KRW.

This is interpreted as a temporary effect caused by the consumption of the government's emergency disaster relief funds starting in mid-last month.

The Ministry of the Interior and Safety analyzed the usage status of emergency disaster relief funds on credit and debit cards from eight card companies (KB Kookmin, Nonghyup, Lotte, BC, Samsung, Shinhan, Hana, Hyundai) between the 11th and 31st of last month, revealing a total usage of 5.6763 trillion KRW. Among this, the largest amount was spent at restaurants. 1.4042 trillion KRW, accounting for 24.8% of the card recharge usage, was consumed there. The amount spent at marts and grocery stores was 1.3772 trillion KRW (24.2%), the second largest, and 590.4 billion KRW (10.4%) was used at hospitals and pharmacies.

Accordingly, approval performance by industry also improved. Wholesale and retail trade approval amounts in May recorded 39.17 trillion KRW, a 17.5% increase compared to the previous year. This is an increase of 4.4 trillion KRW compared to April. Accommodation and food service industries also saw a reduced decline rate of -2.5% in May, down from -13.4% in April. The arts, sports, and leisure-related service industries saw their decline rate drop from 11% to 1.3%.

This content was produced with the assistance of AI translation services.