Credit card firms defy debt control efforts

The number of credit cards issued increased this year, despite government efforts to reduce credit card use in a bid to control household debt.

According to data released by the Credit Finance Association on Monday, the total number of credit cards issued was 122.3 million during the first half of this year. A total of 116.6 million credit cards were issued last year.

This year’s record number means that every job-holder has 4.9 credit cards on average, according to officials. The nation’s population is about 48 million, with the number of economically active persons at about 25.4 million.

“The credit card industry is less worried about overall debt surge now because unlike the days of the 2003 credit card fiasco, we now have more measures to limit servicing card debts using another credit card,” an official at a credit card company said.

“People now tend to own more plastic money than before because they want to enjoy benefits varying across card companies,” he added.

The Financial Supervisory Service, the nation’s top regulator, has been trying to limit credit card firms’ total assets and new card issuance to curb overall household debt. The country’s household debt posted a record high level of 876.3 trillion won as of June, mostly comprised of mortgages and credit card debt. Industry watchers say the popularity of plastic money isn’t likely to slow anytime soon.

“Benefits that come with credit card purchase still exceed that of debit card use, and those benefits are here to stay as competition to capture customers remains stiff among credit card companies,” an industry official said.

By Cynthia J. Kim (cynthiak@heraldcorp.com)