January 08, 2010 09:53
Credit card spending rose last year for a fifth straight year of double-digit growth. According to the Credit Finance Association on Thursday, it jumped 10.58 percent to W332.72 trillion in 2009. The figure includes spending on debit and prepaid cards but excludes loans provided by credit card companies.
Domestic credit card spending grew by 1.53 percent in 2004 on-year, and since then it has jumped by 10 to 18 percent every year.
The association said that last year's increase was bolstered by higher product prices and a rise in the number of people who use plastic. Credit cards were used in 52.1 percent of all consumer purchases in the third quarter of 2009, up from 24.9 percent in 2000. The rise is also partly attributable to an increase in auto sales boosted by government tax breaks for people who traded in old cars for new ones. Car sales, which surged in December just before the tax breaks ended, helped monthly card spending to top W30 trillion for the first time in history.
Financial consultants advise that it would benefit salaried people to use debit cards more than credit cards this year, citing a change in the taxation system. Until the end of last year they received tax refunds on 20 percent of their spending on debit and credit cards. This year the refund on debit card spending will rise to 25 percent.
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