By Kang Seung-woo
The average number of credit cards per person among the economically active hit a record high, when it nearly reached five cards per capita, a finance association said Thursday.
The figure is higher than that of the credit card crisis in 2003 posing a potential risk to the nation’s economy.
According to the Credit Finance Association (CFA), a total of 119.5 million credit cards were issued as of the first quarter of this year to an economically active population of 24.48 million, meaning each individual carries 4.8 credit cards.
The economically active population comprises all persons over age 15 who supply labor in the production of economic goods and services.
Last year the average eclipsed the previous high of 4.6 cards per person set in 2002, by 0.1. The number of credit cards per capita spiked from 0.6 to 4.6 between 1991 and 2002.
However, after the credit card fiasco, in which more than 3 million people defaulted on payments, the number fell below the 4 mark. It has rebounded due to cut-throat competition among credit card issuers.
The total figure of credit card issuance as of the end of the first quarter approached 120 million, up 15 million from 2002, which marked the first time it broke 100 million.
“Recently, KB Kookmin Card’s spinoff from KB Financial Group has triggered fierce competition, and (I think that) it has contributed to each company increasing its number of issuance to lure new customers,” said an industry official.
An official of the CFA said: “The total number of credit cards has been on a huge increase. But compared with the 2003 crisis, card firms’ default ratio and capital-adequacy ratio are very stable.”
Meanwhile, Samsung Economic Research Institute (SERI), a local think tank, said in its report last month that the government needs to take proper measures in terms of credit card loans to prevent default-related trouble from recurring.
“Although it is less serious than those days around the 2003 crisis, financial authorities are required to step up efforts to lower the number of multiple debtors in order to defend households and card companies against any possible insolvency that can have a negative impact on the nation’s economy,” it said.