Credit card loan balances reached an all-time high (Image courtesy of Yonhap)
SEOUL, Dec. 21 (Korea Bizwire) – The financial strain on South Korea’s working class has driven card loan balances to an all-time high, reflecting worsening economic conditions for vulnerable populations.
As of November 2024, the total card loan balance across nine major card companies, including Lotte, BC, Samsung, Shinhan, and KB Kookmin, reached a record 42.54 trillion won ($31 billion), according to the Credit Finance Association.
This marks an increase of 325.2 billion won from October’s previous high of 42.22 trillion won and a 3.67 trillion won rise compared to the same period last year.
The trend has persisted throughout the year, with card loan balances steadily climbing each month. Notable increases were seen in July (620.6 billion won) and October (533.2 billion won), fueled by economic pressures such as rising closures among small businesses.
“Economic hardships for low-income households, including a surge in business closures, have likely contributed to the increase in card loan balances,” said an industry official. However, the pace of growth has moderated due to government oversight.
Other forms of short-term credit have also surged. Debt restructuring loans, where borrowers refinance existing card loans with new ones, grew to 1.72 trillion won, up 69.2 billion won from the previous month.
Cash advance balances rose to 6.92 trillion won, and revolving credit balances—amounts carried over after partial payments—reached 7.13 trillion won.
The steady rise in these figures highlights the deepening financial strain on South Korea’s working class and calls attention to the broader economic challenges faced by vulnerable groups.
Ashley Song (ashley@koreabizwire.com)
