Annual Average Interest Rate 17.3% Credit Card 'Revolving' Carryover Balance 5.8 Trillion Won

Ages 30-40 Account for 63.2%

[Asia Economy Reporter Ki Ha-young] The amount used for revolving credit card payments, where consumers purchase items with a credit card in a lump sum but pay only part of the amount initially and repay the rest later, has exceeded 5.8 trillion won.

According to data received on the 28th from the Financial Supervisory Service by Jeon Jae-soo, a member of the National Assembly's Political Affairs Committee from the Democratic Party of Korea, the revolving credit balance carried over (the amount of debt not fully paid on the payment date and carried over to the next month) of eight specialized credit card companies as of the first half of this year is 5.8157 trillion won. The revolving credit balance was 4.879 trillion won at the end of 2017, 5.3169 trillion won at the end of 2018, 5.793 trillion won at the end of 2019, and 5.6504 trillion won at the end of 2020, showing a 19.2% increase over three and a half years.

The number of members holding revolving credit balances also increased by 13.4%, from 2,227,200 at the end of 2017 to 2,524,600 at the end of June this year.

Revolving credit has the advantage of allowing partial repayment of the payment amount without delinquency and extending the repayment period, but it requires paying high interest. Long-term use can also negatively affect credit ratings.

As of the end of June, the average interest rate for revolving credit at specialized credit card companies was 17.3%. Looking at the revolving credit balance by age group, those in their 30s and 40s accounted for 63.2%. The largest amount was among those aged 40 to 49, at 2.061 trillion won, followed by those aged 30 to 39 (1.6163 trillion won), 50 to 59 (1.1713 trillion won), 60 and older (487.9 billion won), and under 29 (479.2 billion won). Most of the total carried-over balance is payment-related (card payments), while loan-related (cash service payments) accounts for 4.2%.

Representative Jeon said, "As the recession caused by COVID-19 continues, more people are choosing revolving credit to postpone immediate debt burdens despite bearing high interest rates," adding, "This is very dangerous as they may fall into greater difficulties due to the accumulated interest on the amount owed."

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