South Korean card loan balances decline for third consecutive month

South Korean card loan balances have decreased for three consecutive months, reaching 42.68 trillion won at the end of August. This decline follows a peak in May and is largely attributed to financial authorities managing the growth rate of household debt to within 1.5 percent, prompting card companies to adjust their lending volumes.

In contrast to the decline in card loans, revolving credit balances have increased for five consecutive months, reaching 6.99 trillion won in August. Industry analysts suggest this rise is driven by sluggish real economic conditions affecting self-employed individuals and low-credit borrowers. Additionally, revolving credit and loan refinancing balances have both seen increases, indicating that while total card loan volumes are being managed by policy, demand for alternative credit services remains high.