Credit Defaulters Number 460,000

Credit defaulters who are in arrears with over 50,000 won for more than 3 months numbered 460,000.

The Financial Supervisory Commission (FSC) announced on the 26th that credit defaulters numbered 460,000 in March, which is 2 percent of economic activity people except for minors and old people over 65.

FSC added, “adding `semi-defaulters of credit card,` who became credit defaulters by overdue loan over 50,000 won for 1 or 2 months as well as arrears in other financial circles, total credit defaulters till March numbered 1,106,494 persons.” Card related credit defaulters increased by 55,000 persons during last 3 months from 1.041.055 persons at the end of last year.

Card related credit defaulting minors were 6,898 persons decreased by 1,064 persons. By card firms informing credit defaulters, Kookmin Card(772 persons), Foreign Exchange Card(769 persons), and Samsung Card(249 persons) informed less, while LG Card 244 persons more.

This steady increase of card related credit defaulters seems to go on for the time being. That is because card firms competitively issued credit cards since 2000, and cash service, whose interest rate is over 20 percent, out of total arrears takes more than 60 percent.

FSC announced that lots of credit defaulters enlisted in the 1st quarter were members of LG Card, Samsung Card, and Foreign Exchange Card, which were punished of 3-month suspension of business license for neglecting identifying and confirming income. According to FSC source, newly enlisted credit defaulters during 1st quarter numbered 36,940 in LG Card, 28,459 in Samsung Card, and 25,450 in Foreign Exchange Card.

However, 3 Card firms refuted, “no wonder the large number of credit defaulters from large number of total members. There is no uniqueness in the rate of the credit defaulters”

Seo Tae-Jong, division chief of FSC said, “we opened the numbers of credit defaulters by card firms so that they could more carefully care the credit of the members, as they earn enormously. We will open the numbers by firms in order that consumers could judge wisely.”

Seung-Ryun Kim srkim@donga.com