Due to COVID Resurgence... Card Approval Amount Declines for Two Consecutive Months

January Card Approval Amount Decreases by 1.9%
Transportation Industry Plummets by 64.6%

[Asia Economy Reporter Ki Ha-young] As consumption shrinks amid the third wave of the COVID-19 resurgence, credit card approval amounts have recorded negative growth for two consecutive months. Concerns are also rising that card usage may have declined for three consecutive months due to the Lunar New Year holidays last month and the strengthened social distancing measures maintained amid the sharp increase in COVID-19 cases.

According to the 'January Card Approval Performance' announced by the Credit Finance Association on the 2nd, the total card approval amount in January reached 72.7 trillion won, down 1.9% compared to the previous year. During this period, the number of approvals was 1.66 billion, a decrease of 6.9%. This marks the first time since the first COVID-19 wave in March-April last year that the figures have been negative for two consecutive months following December last year.

In December last year, when social distancing level 2.5 was implemented due to the third wave of COVID-19, the total card approval amount was 74.9 trillion won, down 3.8% from the same period last year. The number of approvals also shrank by 8.8% to 1.72 billion. After the card approval amount first declined in March last year when the first COVID-19 wave began, it had been on the rise since May but fell again in December.

However, the average approval amount was 43,762 won, an increase of 5.4% compared to the same period last year. While the trend had been toward smaller card payments, it is interpreted that the number of transactions decreased due to the spread of COVID-19, but the amount paid per transaction increased.

By industry, the transportation sector saw a significant drop in performance, falling by 64.6% compared to the previous year. This was due to reduced use of airlines, railroads, and other transportation as travel and movement were discouraged under strengthened social distancing. Due to poor sales in travel-related services, card approval performance in business facility management and business support services also dropped by 52.3%. Leisure-related service sectors such as arts and sports declined by 46.7% as the number of users of multi-use facilities like theme parks, museums, and karaoke rooms decreased. The accommodation and food service sectors and education service sectors fell by 33.1% and 12.5%, respectively.

Some express concerns that card approval performance may record negative growth for three consecutive months. Typically, card approval amounts decrease in months with Lunar New Year holidays due to shortened business days; last year the holiday was in January, while this year it falls in February. An industry official said, "It appears that card approval amounts have decreased for two consecutive months due to strengthened social distancing amid the third wave of COVID-19," adding, "Since social distancing is maintained in February and the Lunar New Year holiday is included, card approval amounts may also decrease compared to the previous year."