Credit card loan balances reached an all-time high last month. (Image courtesy of Yonhap)
SEOUL, May 21 (Korea Bizwire) – As the South Korean public continues to grapple with high interest rates and soaring consumer prices, credit card loan balances reached an all-time high last month, reflecting the mounting financial strain on ordinary citizens.
According to data released on May 20 by the Credit Finance Association, the combined credit card loan balance of South Korea’s nine major card issuers (Lotte, BC, Samsung, Shinhan, Woori, Hana, Hyundai, KB Kookmin, and NH Nonghyup) stood at 39.9 trillion won at the end of April, marking an increase of 482.3 billion won from the previous record set in March.
As the economic downturn persists, borrowers have increasingly turned to credit card loans as an alternative source of credit, with some lenders like savings banks tightening their lending standards. Data from the Bank of Korea’s Economic Statistics System revealed that the outstanding loan balance at savings banks dropped to 101.3 trillion won as of the end of March, the lowest level in over two years.
“Amid the challenges of high interest rates, high prices, and continued declines in savings bank lending, credit card companies are increasingly the only option available for those in need of urgent funds,” a credit card industry official explained.
In addition to the surge in credit card loans, the outstanding balance of cash advance services rose to 6.5 trillion won in April, an increase of approximately 1 trillion won from March. Revolving credit balances also edged up slightly to 7.3 trillion won.
Among the major card issuers, Lotte Card reported the highest average interest rate on credit card loans at 14.86% in March, followed by Woori Card at 14.83% and Samsung Card at 14.61%.
M. H. Lee (mhlee@koreabizwire.com)
