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Card spending on course to surpass W1,000tr this year

South Korean consumers are ramping up credit and debit card balances and their spending could exceed 1,000 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 percent from the previous year. The uptrend in spending has been the norm since 2018, when it totaled at 810 trillion won, according to the Credit Finance Association, a group of local card companies.

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

Of 977 trillion spending last year, individuals accounted for 804 trillion won, up 9.7 percent from a year earlier, while companies made up the rest 173 trillion won, up 13.3 percent from the previous year.

Balances jumped highest in the fourth quarter on-year, with the annual rise at 13.9 percent, while the rest quarters saw an on-year hike all less than 10 percent.

Credit cards typically 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 the COVID-19 cash handouts provided to households last year might have further pushed up the total.

By Choi Si-young (
Korea Herald daum