Credit card spending rate slows

South Koreans’ credit card spending reached 48.4 trillion won ($44 billion) last month, up 3 percent from the same period a year ago, the Credit Finance Association said Thursday.

This marked the second-lowest increase since February last year, when credit card spending grew 2.5 percent on-year. In January 2014, the increase rate stood at 9 percent.

CREFIA attributed the low increase to less overall spending in January as the Lunar New Year holiday was in February this year.

This led to less retail spending at department stores and discount chains. With the falling oil prices, refiners saw its eighth consecutive menthy decline in credit card settlements for gasoline.

Spending via credit cards stood at about 38.7 trillion won last month, up 1.2 percent from the same period a year ago, and spending via debit cards reached 9.6 trillion won, up 11.9 percent.

People used their credit cards to pay for goods worth about 40,000 won on average last month, CREFIA said.

With regional governments increasing their acceptance of credit cards to pay for utility bills, the use of plastics increased 17.6 percent. Also, Internet shopping via credit cards increased almost 56 percent.

Meanwhile, Korea’s household credit reached a record high of 1,089 trillion won as of the end of December, the Bank of Korea said Thursday.

The increase was attributable to relaxed mortgage regulations and key interest rate cuts last year.

By Park Hyong-ki (hkp@heraldcorp.com)