Last Year Credit and Debit Card Spending 877 Trillion Won... 0.3% Increase Due to COVID-19 Impact

On the 21st, citizens are selecting vegetables at Lotte Mart Seoul Station branch, where a special exhibition for price-stabilized vegetables is being held. Photo by Moon Honam munonam@

[Asia Economy Reporter Oh Hyung-gil] Last year, the usage amount of credit and check cards reached 877 trillion won, showing only a slight increase compared to the previous year. Due to the impact of COVID-19, consumption contracted, causing a significant decrease in the growth rate of credit card usage.

According to the Financial Supervisory Service's credit card company business performance report on the 29th, as of the end of last year, the cumulative number of credit cards issued was 113.73 million, an increase of 2.5% compared to the previous year. The number of check cards issued was 110.07 million, a decrease of 0.8% from the previous year.

The growth rate of credit card issuance, which was 5.6% in both 2018 and 2019, was halved. Due to social distancing and other factors, online issuance increased significantly.

Credit card usage amounted to 705 trillion won, a 0.6% increase compared to the previous year, while check card usage was 172 trillion won, a 1.0% decrease from the previous year.

Card loans also saw a slowdown in growth. The outstanding balance of card loans increased by 4.7% compared to the previous year, reaching 41 trillion won.

The balance of short-term card loans (cash services) decreased by 14.3% to 6 trillion won, while the balance of long-term card loans (card loans) increased by 9.2% to 35 trillion won.

It is analyzed that as card companies reduced cash service handling for risk management purposes, consumers used card loans, which have lower interest rates compared to cash services.

Meanwhile, last year, the net profit of eight specialized card companies was 2.0264 trillion won, a 23.1% increase compared to the previous year. Although profits slightly decreased due to consumption contraction, net profit increased as fees from overseas affiliates and recruitment costs decreased more significantly.

The delinquency rate of card companies (based on total claims) improved by 0.14 percentage points from the end of the previous year to 1.29%.

A financial authority official stated, "The soundness indicators such as delinquency rate and adjusted capital adequacy ratio are in good condition, and the coverage ratio also exceeds 500%, a high level. However, given the unprecedented prolonged COVID-19 situation, the possibility of accumulated latent non-performing loans cannot be excluded. Therefore, we will continuously monitor the impact of changes in overall conditions such as the speed of consumption recovery and interest rate volatility, and proceed steadily with measures to strengthen liquidity risk management."

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