On-year growth of card use hits record low in August

The on-year growth rate of credit card use in South Korea hit a record low in August as more people refrained from spending money amid the protracted economic recovery, data showed Tuesday.

The value of Koreans’ credit card spending amounted to 28.5 trillion won ($26.2 billion) in August, up 2.7 percent from a year earlier, according to the data compiled by the Bank of Korea.

The August growth compared with a 13.6 percent on-year expansion tallied in July and marked the slowest gain ever, it added.

The data came as the South Korean economy loses ground on weak exports and sluggish domestic demand. The local economy grew 0.2 percent in the third quarter from three months earlier, slowing from 0.3 percent in the second quarter.

South Korea’s domestic demand remained lackluster largely because households’ high indebtedness is squeezing their capacity to spend, further hurting the economic growth.

The BOK cut its 2012 and 2013 growth estimate to 2.4 percent and 3.2 percent, respectively.

South Koreans also cut their spending on eating out and fuel expenses in August, leading the on-year growth rates of such expenditures to hit a record low as well, the data showed. (Yonhap News)