People put their plastic away in Jan.The monthly on-year growth rate of credit card spending stood at its lowest level for 45 months in January as people tightened their purse strings due to the faltering economy, the Credit Finance Association said yesterday.
According to statistics released by the association, Koreans spent a combined 43.1 trillion won ($39.3 million) with plastic in January, up 6.3 percent on-year.
That’s the slowest pace of growth since March 2009’s 6.2 percent, it said. The statistics include spending with credit cards, debit cards and prepaid cards, but not cash advances or card loans.
“Although the country’s consumer prices grew 1.5 percent and the number of employees rose by 1.4 percent in January, the economic slowdown has negatively influenced the growth ratio of credit card spending,” said an employee at the association.
By sector, large supermarket chains saw the biggest drop. Card spending was down 13.2 percent on-year in January, standing at 2.6 trillion won.
A total of 3.9 trillion won was spent on cards at gas stations in the same month, down 3.1 percent on-year due to falling gas prices and heavy snowfalls that made many people leave their cars at home.
Restaurants were the biggest gainers. People put 5.4 trillion won worth of meals on plastic in January, up 17.7 percent on-year. Restaurants were open more than usual during the month as the Lunar New Year holiday, when most such establishments close, fell in February this year. Card spending at hospitals jumped by 8.8 percent to 3.6 trillion won as many people went to get flu shots after the Centers for Disease Control and Prevention issued a flu alert.
Of the 43.1 trillion won, 84 percent was credit card spending followed by 15.7 percent on debit cards and 0.3 percent on prepaid cards.
“The introduction of new credit card transaction fees is likely to hurt card firms’ profitability as they have lowered average transaction fees,” said an employee at the association.
By Kim Mi-ju [firstname.lastname@example.org]