Personal Credit Card Spending Negative for Two Consecutive Months... April Down 2.9% Year-on-Year

'Untact Consumption' Online Increases by 21%

[Image source=Yonhap News]

[Asia Economy Reporter Ki Ha-young] Last month, the decline in personal credit card spending narrowed compared to the previous month. This is interpreted as a result of consumer sentiment thawing as the domestic spread of the novel coronavirus infection (COVID-19) showed signs of easing.

According to data submitted on the 13th by Park Kwang-on, a member of the Democratic Party of Korea, from eight full-service card companies including Shinhan, Samsung, KB Kookmin, Hyundai, BC, Lotte, Woori, and Hana, personal credit card spending last month amounted to 54.5515 trillion won, down 2.9% compared to the same period last year.

However, the decrease significantly narrowed. In March, personal credit card spending fell by as much as 6.7% year-on-year due to the spread of COVID-19. Since the related statistics began in December 2010, personal credit card spending has only decreased twice: in April (-1.3%) and May (-1.6%) of 2014, when the Sewol ferry disaster occurred.

As people refrained from going out due to COVID-19, untact (contactless) consumption increased significantly. Last month, online credit card spending (9.728 trillion won) surged 21.3% compared to the same period last year. This is analyzed as a result of consumers purchasing food, daily necessities, and other items online.

However, as COVID-19 began to ease, the growth rate last month remained at the previous month's level (22.7%).

Offline credit card spending (44.8235 trillion won) decreased by 6.9% year-on-year. This is larger than February's (-0.1%) but shows a slowdown compared to March's (-11.8%).