Card spending is on track to exceed W1,000tr this year

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South Korean consumers are increasing their credit and debit card balances and spending could top 1 trillion won ($832 billion) for the first time this year, data showed Friday.

South Koreans spent 977 trillion won on credit and debit cards last year, up 10% from the previous year. The upward spending trend has been the norm since 2018, when it stood at 810 trillion won, according to the Credit Finance Association, a group of local card companies.

“COVID-19 is accelerating the shift to electronic cash payments and consumers are increasingly taking advantage of contactless payments made with their credit and debit cards. The trend will continue this year,” a source familiar with the matter said.

Out of 977 trillion spent last year, individuals spent 804 trillion won, up 9.7 percent from a year earlier, while businesses made the remaining 173 trillion won, up 9.7 percent. 13.3% compared to the previous year.

Clearances jumped in the fourth quarter year-over-year, with a year-on-year rise of 13.9%, while other quarters saw a year-over-year rise of less than 10%.

Credit cards generally follow a seasonal pattern, in which balances show more substantial increases in the fourth quarter than in the second or third quarter, the source said, adding that COVID-19 cash rebates provided to households the last year may have pushed the total up even further. .

By Choi Si-young (siyoungchoi@heraldcorp.com)

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