3rd Quarter Card Approval Amount Increases by 8.6%... Optimism for 4th Quarter (Comprehensive)

Yeosin Association Announces Q3 2021 Card Approval Performance
With With-Corona Policy Starting Next Month... Consumption Recovery Expected to Continue

[Asia Economy Reporter Ki Ha-young] Despite the 4th wave of COVID-19, the card approval amount in the 3rd quarter increased by nearly double digits. With growing expectations for the phased return to normal life under the 'With Corona' policy starting next month, card consumption in the 4th quarter is also expected to expand further.

According to the Credit Finance Association's Credit Finance Research Institute on the 29th, the total card (credit, check, and prepaid cards) approval amount in the 3rd quarter of this year recorded 248 trillion won, an 8.6% increase compared to the previous year. During the same period, the number of approvals also grew by 7.3% (6.07 billion transactions). The quarterly card approval amount growth rate this year is close to 10%, with 8.7% in the 1st quarter, 9.9% in the 2nd quarter, and 8.6% in the 3rd quarter, showing a continuous upward trend.

A Credit Finance Association official explained, "Despite the resurgence of COVID-19 and strengthened social distancing measures, the overall consumer sentiment recovery seems to be sustained due to economic recovery expectations from expanded vaccination and the distribution of COVID-19 coexistence national support funds."

In the 3rd quarter, the demand for purchases through non-face-to-face and online channels remained strong, and with the application and distribution of the COVID-19 coexistence national support funds starting in September, favorable approval performance continued. The personal card approval amount in the 3rd quarter was 204.4 trillion won, an 8.6% increase compared to the previous year. Corporate cards also recorded 43.7 trillion won, up 8.3% from last year.

By industry, wholesale and retail trade (12.2%), transportation (5.1%), and education services (18.5%) showed growth. In wholesale and retail trade, card approval amounts increased due to the rise in non-face-to-face and online purchases and the recovery of sales at department stores and large marts. Transportation increased by 5.1% compared to the previous year due to a base effect from decreased use of transportation means in the 3rd quarter of last year. However, it decreased by 54.3% compared to the 3rd quarter of 2019, indicating that it is premature to consider it a full recovery. Accommodation and food services decreased by 7% compared to the previous year due to restrictions on travel, movement, and gatherings. However, considering the upward trend in the restaurant industry business outlook index and food orders via delivery, the actual approval performance in the food service industry is expected to be better than this.

The card approval amount growth trend is also expected to continue in the 4th quarter, driven by increased expectations for the With Corona policy to be implemented from next month. According to the Bank of Korea, the Consumer Confidence Index (CCSI) in October was 106.8, rising 3 points from the previous month and showing an upward trend for two consecutive months. A CCSI above 100 indicates optimistic consumer sentiment. The CCSI had declined for two consecutive months in July (103.2) and August (102.5) but rebounded from September (103.8).

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