[2023 National Audit] Exploiting COVID-19... Senior Citizens' Card Loans Increased by 2.5 Trillion Won

2.5 Trillion and 170,000 Increase Over 3 Years Since COVID-19
Balance Growth Rate a Whopping 57.3%

Over the three and a half years since COVID-19, the card loan balance and number of users among seniors aged 60 and above have increased by 2.5 trillion KRW and 170,000 people respectively, raising concerns that proactive measures from financial authorities are necessary.

According to data submitted by the Financial Supervisory Service to Song Seok-jun, a member of the National Assembly's Political Affairs Committee from the People Power Party, on the 11th, the card loan balance rose from 29.1 trillion KRW at the end of 2019 to 34.85 trillion KRW as of the end of June this year, an increase of 5.74 trillion KRW.

Song Seok-jun, member of the People Power Party./Photo by Yoon Dong-ju doso7@

By age group, card loan balances increased in all age groups except those in their 30s. The 20s increased by 210 billion KRW, the 40s by 880 billion KRW, the 50s by 2.78 trillion KRW, and those aged 60 and above by 2.52 trillion KRW. In contrast, the 30s saw a decrease of 650 billion KRW in card loan balances.

The number of card loan users decreased in all age groups except those in their 60s. The 20s decreased by 30,000 people, the 30s by 250,000 people, the 40s by 240,000 people, and the 50s by 10,000 people, whereas those aged 60 and above increased by 170,000 people.

Compared to other age groups, those aged 60 and above saw simultaneous increases in both the number of card loan users and balances, effectively exposing them to twice the risk. In particular, the card loan balance growth rate for seniors aged 60 and above was a staggering 57.3%, the fastest increase among all age groups since COVID-19.

The problem is that the average interest rate on card loans was high, ranging from a minimum of 11.66% to a maximum of 17.2% as of September. Furthermore, the interest rates on three-year asset-backed securities (ABS), which are the funding rates for credit card companies, have been continuously rising, suggesting that the interest burden on card loan users will increase further.

Representative Song said, "It appears that emergency livelihood loans for low- to medium-credit seniors with vulnerable incomes have concentrated into card loans since COVID-19," adding, "With expected future increases in card loan interest rates, proactive and preemptive measures by financial authorities are necessary to alleviate the principal and interest burdens on low- to medium-credit seniors."

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