Debit card use surges in first half

Korea's debit card spending jumped nearly 22 percent on-year in the first half due to government efforts to curb household debt and consumers' belt-tightening amid a protracted economic slump, industry data showed Tuesday.

Purchases made with debit cards totaled 39.5 trillion won ($36.3 billion) in the January-June period this year, up 21.98 percent from 32.4 trillion during the same period a year earlier, according to the data.

The growth rate far outpaces that of credit card use. Over the same period, credit card spending rose 3.42 percent on-year to 283.2 trillion won.

Debit card spending has been expanding stiffly this year, with the amount rising by 1 trillion won each quarter for the past nine months. The value of transactions via debit cards is expected to surpass 100 trillion won for the whole of 2012.

The ratio of debit card spending to the entire plastic money market accounted for 14.52 percent in the first half, up 1.67 percentage points from a year earlier.

Market watchers attributed the first-half surge in debit card spending to the financial regulator's move to reduce the country's record-high household debts by tightening credit card rules and boosting debit card usage.

The country's household debt reached a record 922 trillion won as of the end of June, or about 74 percent of its gross domestic product for 2011.

Also responsible was consumers' preference for debit cards, which enable them to live within their means and thus rein in debt, they added.

Korea's debit card market is led by KB Kookmin Card Co., the card unit of South Korea's No. 2 banking group KB Financial Group Co., with purchases made with its cards reaching 8.2 trillion won in the January-June period. (Yonhap)