Credit cards account for over half of private spending in Q1

SEOUL, June 6 (Yonhap) -- Credit card settlements accounted for more than half of
the total private spending in South Korea during the first quarter of this year
as a growing number of people tend to purchase goods and services on credit, a
report showed Saturday.
According to the report by the Credit Finance Association, South Korea's credit
card spending amounted to 70.56 trillion won (US$60.8 billion) in the
January-March period.
The figure accounted for 51 percent of the nation's total private sector spending
worth 138.48 trillion won, the report showed. It is also higher than the 49
percent posted during the same quarter a year earlier.
Credit card settlements stood at only 5.6 percent of total expenditure in 1990,
before jumping to 24.9 percent in 2000 and soaring to 45.7 percent in 2002 mainly
thanks to government measures aimed at bolstering credit-based purchases.
After the nation was hit by a credit bubble burst in 2003, the ratio slid to 41.7
percent the following year but has maintained an upward trend ever since as
consumers increasingly prefer credit cards over cash. Last year, the ratio
exceeded the 50 percent mark.
"Consumers tend to pay for even small purchases worth less than 10,000 won by
using credit cards. And for cram school, insurance, auto service and taxi fares,
which used to be covered mostly by cash, people seem to be using credit cards,"
an association official said.
kokobj@yna.co.kr
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