Credit card debt averages 772,000 won

It was learned that personal debt on credit cards stands at an average of 772,000 won. In particular, it was estimated that cash service and card loans, which bear an annual interest rate as high as 29 percent, account for 64 percent of the entire card debt.

The Bank of Korea reported that household credit card debt totaled 39.8 trillion won as of the end of September last year, showing an increase of 70.5 percent from the end of 1999's 23.3 trillion won. Of the total, debt based on cash service or card loans jumped 86.8 percent to 25.3 trillion won compared with the end of 1999, while installment-payment purchases rose 47.9 percent during the same period.

As of the end of September 2000, a total of 51.55 million credit cards have been issued. It means that an average Korean has 1.12 credit cards. Considering the economically active population, average adults must have three or four cards, according to industry analysts. The per-card debt exceeds 772,000 won, so the personal debt of actual card users would amount to 2-3 million won.

It was pointed out that the soaring credit card debt is due largely to abnormal use of cards, as cash service constituted 60-70 percent of the total billing, although the number of cards issued is on the rise, as well.

Sung Dong-Ki esprit@donga.com