June 19, 2013 12:26
Credit card spending grew by the smallest margin on record last month as consumers tightened purse strings amid the prolonged recession.
According to the Credit Finance Association on Tuesday, credit card spending rose a mere 2.4 percent to W38.6 trillion (US$1=W1,132) in May from a year earlier. In 2012, credit card spending rose over 10 percent on-year every month, but that dropped to one-digit growth this year.
A closer look shows that the downturn has changed consumption behavior. Credit card spending on the Internet and at department stores fell 33.7 percent and 6.1 percent in May, but businesses selling daily necessities saw card transactions rise -- convenience stores 29.3 percent, supermarkets 10.3 percent and big superstores 4.8 percent.
In other words, people's circumstances are so pinched that they have to borrow just to live day-to-day.
Meanwhile, debit card spending also continues to grow, standing at W7.8 trillion in May, up 10.2 percent on-year.
A staffer with the association attributed the rise to the fact that tax refunds on debit card spending climbed to 30 percent this year, twice as much as on credit card spending. Debit card spending stood at W26,599 per transaction, compared to W60,926 for credit cards.
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