230,000 Persons Have over 10 Credit Cards

It is the era of credit cards, the advertisement of which is flooding everywhere on the newspaper and TV.

230,000 persons reportedly have more than 10 credit cards. And 530,000 persons made cash advances (excluding credit card loans) of over 10 million won during February.

Financial Supervisory Commission (FSC) said on the 5th, “23 million persons in economic activities excluding minors and old aged people over 65 hold 89 million cards, or 4 cards for each. ”

According to FSC, 233,360 persons have more than 10 credit cards, and 85 persons over 20, and 3 persons 23.

Credit card users who made cash advances of over 5 million won numbered 1370, 599 persons, over 10 million won 530,682 persons in February. FSC said, “27 members made over 50 million won of cash advances. ”

Seo Tae-Jong chief of credit card division in FSC said, “persons who made cash advances over 10 million won must be the persons who pay debts with advanced cash after issuing many credit cards. ” The charge for cash service is yearly 20 to 22 percent, which is much higher than market interest rate, as the ratio of arrearage or bad debt is rather high. Division chief Seo said, “the person who uses cash service for paying debt is most likely to be listed on the black list. ”

FSC found out the reason of explosively increasing scope of cash advancing at 1999` abolishment of provision that `the limit of cash service is maximum 700,000 won a month. ` Sum total of cash advancing by credit cards was some 48 trillion won in 1999, 145 trillion won in 2000, and 267 trillion won in 2001.

FSC will include the status of cash advancing with credit cards into the Korea Federation of Banks` network of loan information from July so that banks could find out who advanced cash how much.

Seung-Ryun Kim srkim@donga.com