Spending on credit cards overseas is at all-time highKoreans’ credit card spending overseas reached an all-time record last year on the back of the rising value of the Korean won against the U.S. greenback and the growing number of direct purchases made on foreign websites such as Amazon.com.
According to the Credit Finance Association, Koreans spent $12.2 billion in total abroad on their credit cards in 2014. This is a 15.7 percent rise year-on-year.
Last year, the won appreciated 3.8 percent against the U.S. dollar while the number of Koreans traveling abroad increased 8.3 percent year-on-year. Additionally, direct purchases of goods from overseas via online platforms and Internet shopping malls surged 48.5 percent.
But the trend is unlikely to continue as the won has been depreciating recently. In last year’s fourth quarter, the value of the won dropped 2.4 percent against the U.S. dollar. As a result, overseas credit card spending grew 13 percent year-on-year in the last three months, a drop from the 18.3 percent reported in the third quarter last year.
Meanwhile, foreigners’ credit card spending in Korea has also risen to an all-time record. Last year, foreigners visiting Korea spent $11.57 billion in total, a 41.7 percent rise year-on-year.
The sharp increase was largely due to Chinese tourists, particularly those using China’s largest credit card issuer, UnionPay. Credit card spending via UnionPay surged 108.7 percent last year. The sudden increase is largely because more stores are now accepting the Chinese credit card.
BY LEE HO-JEONG [firstname.lastname@example.org]