South Korea's plastic card spending moved up 1 percent on-year in September, marking an all-time low growth due mainly to the lower number of business days amid the Chuseok holiday, a trade association said Thursday.
South Korea's combined plastic card spending totaled 46.3 trillion won ($43.6 billion) last month, inching up from 45.8 trillion won tallied a year earlier, according to the data by the Credit Finance Association (CREFIA).
It marked a sharp drop from a whopping 7.2 percent and a 7.6 percent on-year growth tallied in July and August, becoming the slowest growth since CREFIA started to compile such data.
CREFIA said the slowed growth came as the number of business days fell in September due to the three-day Chuseok holiday, while the weakened consumers' sentiment also added to the deceleration.
Of the combined purchases made with plastics, ones by credit cards came to 37.8 trillion won in August, down 1.7 percent from a year earlier, marking the first on-year drop since CREFIA started to track such data.
CREFIA said the decline in spending with credit cards coincided with improved government efforts since 2011 to spur the use of debit cards as part of its bid to secure a more stable source of tax revenue.
The latest policy to encourage the use of debit cards appeared in the revised tax law in which the finance ministry said it will give a 30 percent tax exemption on spending by debit cards, while lowering the rate on the expenditure by credit cards to 10 percent from the current 15 percent.
Accordingly, spending with debit cards surged 15.8 percent over the cited period to reach 8.3 trillion won, accounting for 17.9 percent of the combined plastic spending tallied in September.
Meanwhile, the combined spending with plastics came to 138.4 trillion won over the third quarter, advancing 5.2 percent from a year earlier. The growth accelerated from an all-time low figure of 4.1 percent tallied in the second quarter. (Yonhap News)
