Strong won drives travel spending

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Strong won drives travel spending

As the appreciation of the won encourages people to travel abroad, credit, debit and check card spending has reached record levels.

According to the Bank of Korea, overseas card spending last year amounted to $9.4 billion, up 9.5 percent from 2011. Spending was especially strong in the fourth quarter, expanding 16.4 percent year-on-year to $2.5 billion.

In 2008, the number of travelers fell 10 percent to 12 million people as the value of the won plummeted during the Asia financial crisis. The following year, the number nose-dived an additional 20 percent to slightly less than 9.5 million.

But as the economy got back on track in 2010, the number of people traveling abroad rose 31.5 percent. The rebound continued in 2011 with an increase of 1.6 percent to 12.7 million and an 8 percent jump in 2012 to 13 million.

Overseas card spending was $7.2 billion in 2010, up 35.2 percent year-on-year, and $8.6 billion in 2011, an 18.5 percent increase.

Last year a person traveling abroad spent about $464, 6.6 percent less than the $496 in 2011.

The data also show a trend toward greater use of check cards in 2012, with spending surging 78 percent from a year earlier to $1.7 billion. Check card spending now accounts for more than 18 percent of the total. Check cards are similar to debit cards with more benefits, such as 24 hour use compared instead of being limited bank operation hours.

Credit card spending growth slowed a bit last year, increasing 10.3 percent to $6.4 billion. It is still the most used form of spending overseas, representing 68.3 percent of the total.

With household debt at a record level, the government has encouraged the use of check cards by offering tax incentives.

By Lee Ho-jeong [ojlee82@joongang.co.kr]

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