Overseas credit card use up

By Kang Seung-woo

Koreans’ overseas card spending hit an all-time high in the third quarter of this year, as more people traveled abroad, the central bank said Wednesday.

According to the Bank of Korea (BOK), overseas card use by Koreans reached $2.3 billion (2.62 trillion won) in the July-to-September period, up 6.1 percent from $2.16 billion the previous quarter.

The reading marked the largest amount ever since such data was first compiled.

“During the third quarter, more Koreans traveled abroad, which contributed to card spending reaching a record high,” said a BOK official.

The number of Koreans who headed abroad in the third quarter stood at about 3.5 million, up 19 percent from three months earlier.

This data comes as the nation’s credit card spending rose nearly 10 percent in the first six months of 2011 from a year ago, raising concerns over another possible credit card crisis.

In the first half, credit card spending totaled 261.7 trillion won, up from 239.1 trillion won the previous year, which put the use of plastic on pace to break 500 trillion won by the end of the year.

The projected amount is the largest since 2002, when credit card spending reached 622 trillion won that came from excessive card issuance.

The growing credit card spending presents a headache for policymakers who worry that excessive usage could deteriorate the nation’s heavy household debt problem. As part of containing the soaring credit card spending, the financial authorities have tightened the monitoring of card issuers’ total assets, fresh card issuance and marketing costs.

Household debt logged a record 892.5 trillion won as of the end of September, up 16.2 trillion won from three months earlier, according to the central bank.

Of the entire overseas card spending, credit cards accounted for 67.7 percent, followed by 22.7 percent for debit cards and 9.6 percent for check cards.

Despite the all-time high in the overall overseas card use, the amount of spending per person fell slightly from $521 in the second quarter to $513 in the third, a 1.5 percent decline, due to the rising currency exchange rate.

In the cited period, card spending by outbound local residents grew 16.8 percent from the previous quarter’s $920 million to $1.07 billion, with its per capita card use at $417.