South Korea card loan balance reaches record 43 trillion won

At the end of May, the combined card loan balance of nine major South Korean credit‑card companies rose to 43.25 trillion won, up 2.7 trillion won from the previous month, marking a new all‑time high. The surge follows a rebound in demand for “debt‑investment” after a brief decline caused by tighter bank‑credit limits and stricter total‑debt‑service‑ratio (DSR) rules.

Regulators have capped individual bank credit at 1 billion won and applied a 40 % DSR ceiling, prompting borrowers to shift to card‑based loans. In response, the Financial Supervisory Service summoned six card issuers—Samsung, Hyundai, KB Kookmin, Lotte, BC, and NH‑Agriculturals—to tighten household‑debt management. Average card‑loan interest rates climbed to a range of 11.16 %–14.33 %, with the upper bound rising slightly from the previous month. Card companies are curbing loan growth by reducing marketing, limiting loan approvals, and tightening credit assessments, while warning that excessive regulation could push vulnerable borrowers into “real‑need cliffs.”