Even Small Amounts Overdue... Bank Credit Card Loan Delinquency Rate Hits Highest in 8 Years

Small Amount Card Loan Delinquency
Reflects High Interest Rates and Worsening Economic Conditions

On the 23rd, as domestic market interest rates and bank loan interest rates rapidly rise, a banner displaying loan interest rates is hung on the exterior wall of a commercial bank in Seoul. Photo by Jinhyung Kang aymsdream@

Not only the household and loan delinquency rates at banks but also the delinquency rate on credit card loans have risen significantly.

According to the Bank of Korea Economic Statistics System on the 18th, the delinquency rate on credit card loans at general banks (based on principal delinquency of 1 day or more) was recorded at 2.9% at the end of August. This figure includes both commercial banks and regional banks. It is the highest level in eight years since August 2015 (3.1%).

The delinquency rate on credit card loans at general banks gradually declined from a peak of 3.4% in November 2014 to 1.8% in September last year. However, it began to rise to 2.2% in January this year, then increased sharply to 2.5% in February and 2.7% in May.

As of the end of August, the delinquency rate on household loans at general banks was 0.4%, and the delinquency rate on corporate loans was 0.5%. The delinquency rate on card loans was higher. A commercial bank official explained, "Compared to household loans, card loans are small loans, and the increase in customers delinquent on these small loans indicates that the delinquency situation is worsening."

Meanwhile, the delinquency rate for domestic specialized card companies in the first half of the year was 1.58%, up 0.38 percentage points from the end of last year. The delinquency rate for the third quarter of this year is expected to reach 2%.

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