Credit card spending growth slows in March

By Kang Yoon-seung SEOUL, April 23 (Yonhap) -- South Korea's credit card spending grew at a slower pace in March than a year earlier as the economic slowdown dented consumer sentiment, a trade association said Tuesday. Purchases made with credit cards totaled 45.3 trillion won (US$40.5 billion) last month, up 5.6 percent from the 42.9 trillion won tallied a year earlier, according to the data compiled by the Credit Finance Association (CREFIA). The number is far lower than the 14.5 percent on-year growth tallied in March 2012, the data showed. The figure includes spending with credit, debit, and prepaid cards. Cash advances, overseas spending and card loans are excluded. The country's card spending sank to an all-time low in February growing 3.4 percent on-year. The association said the slowdown in plastic spending came as consumers refrained from making purchases with credit cards due to the gloomy outlook on the country's economy. The government's move to tighten credit card regulations to reduce the country's record-high household debt also contributed to the slowdown, it added. Purchases at large discount stores increased 5.8 percent on-year last month due mainly to higher prices of goods. Payments at smaller supermarkets advanced 8.5 percent as well. In contrast, spending at department stores plunged 18 percent on-year last month as the demand for luxury goods was spooked by the protracted economic slowdown. Debit cards accounted for 16.5 percent of the total card purchases in March, up 0.7 percentage point from a year earlier. Credit cards accounted for 83.1 percent. The association said debit card spending is expected to increase down the road in line with the government's tougher regulations on credit cards firms, and an anticipated increase in tax incentives on debit card uses. The association added the government should make efforts to revitalize its credit card industry, as a reasonable amount of spending via plastics can help in bolstering consumer sentiment and the local economy. colin@yna.co.kr (END)