By Yoon Ja-young
Staff Reporter
Despite the economic slump, the nation's credit card spending saw double digit growth in 2009 for the fifth consecutive year.
The Credit Finance Association said card spending totaled 332.7 trillion won last year, up 10.58 percent from 2008.
Statistics showed that plastic is quickly replacing cash in everyday transactions. In private consumption, payment using cards took only 5.6 percent of total expenditure in 1990. This rose to 45.7 percent in 2002, and marked 50.1 percent in 2008.
Credit card spending accounted for 52.1 percent of total private consumption for the first nine months of last year.
People are even using it for small sum payments. According to BC Card, over half of credit card payments by its subscribers were made at convenience stores.
The economy once suffered from the collapse of a credit card bubble in 2003 following reckless card issuance. Credit card spending grew only 1.53 percent in the following year.
However, the government has been encouraging their use, while keeping its eye on the soundness of card debt. Taxpayers can get tax deductions for using cards. The tax incentive aimed at blocking tax evasion by the self-employed such as the owners of bars or restaurant, and doctors and lawyers.
Credit card companies are also attracting subscribers with various mileage and cash back programs, making the cards a more attractive option than cash.