One in every 5 credit cards not in use

One in every five credit cards issued in Korea is dormant, as heated competition among credit card firms has resulted in excessive card issuances, data showed Wednesday.

The number of unused credit cards reached 23.8 million as of end-October, which translates into 92 percent of the country's economically active population holding one dormant plastic card, according to the data by the Financial Services Service (FSS). Dormant credit cards refers to accounts without transaction records during a 12-month period.

South Korea's economically active population reached 25.7 million in October, according to Statistics Korea. The combined country's combined credit card issuance reached 116 million in June.

The massive amount of dormant plastic cards is attributable to local credit card firms vying intensely to garner a larger market share, market watchers said.

Shinhan Card Co., the country's top industry player, held 5 million inactive credit cards, the largest amount among local credit card firms.

Hana SK Card Co. held the highest portion of dormant credit cards, which reached 26.7 percent. Samsung Card Co. held a comparable figure of 21.8 percent, according to the data.

Given the average cost of issuing a credit card is estimated to be 15,000 won ($13.78), market watchers said local firms wasted 360 billion won in producing inactive cards, which may potentially come as a drag to their balance sheets.

Meanwhile, the number of such unused credit cards is expected to be slashed in half next year, as the FSS made it compulsory for credit card firms to notify subscribers one month before an account is scheduled to become inactive. (Yonhap)