Clear Recovery in Consumption... Card Approval Amount in Q1 This Year Up 8.7% YoY

Yeosin Association '2021 1st Quarter Card Approval Performance Analysis'

[Asia Economy Reporter Ki Ha-young] As suppressed consumption due to COVID-19 revives, the card approval amount in the first quarter of this year showed a significant increase compared to the previous year.

According to the '2021 Q1 Card Approval Performance Analysis' released by the Credit Finance Association on the 29th, the total card approval amount in the first quarter of this year was 223.8 trillion KRW, an 8.7% increase compared to the previous year. During the same period, the number of approvals also rose by 3.3% to 5.2 billion transactions compared to last year. This is a clear improvement compared to the 1.7% increase in approval amount in the fourth quarter of last year.

Personal card approval amount increased by 8.2% to 185 trillion KRW, while corporate card approval amount rose by 11.5% to 38.9 trillion KRW. Credit card approval amount was 175.3 trillion KRW, up 9.1%, and check card approval amount was 48 trillion KRW, up 6.7%.

The Credit Finance Association explained, "There was a base effect due to the relatively sluggish increase in card approval amount in the first quarter of last year," and analyzed that "the overall consumption recovery appeared due to the slowdown in the third wave of COVID-19 and the easing of social distancing measures."

In fact, with the relaxation of operating hour restrictions on multi-use facilities in the metropolitan area and the lifting of restrictions in non-metropolitan areas, offline-centered meeting and leisure-related industries such as academies, restaurants, and cafes partially recovered. The approval amount growth rate for 'Accommodation and Food Services' decreased by 33.1% in January compared to the previous year but turned to an increase of 12.4% in February and recorded 16.1% in March.

By industry, 'Wholesale and Retail Trade' and 'Educational Services' showed an increasing trend, while 'Transportation' and 'Accommodation and Food Services' decreased.

Due to non-face-to-face, online purchases, increased automobile sales, and sales recovery in some sectors such as department stores, 'Wholesale and Retail Trade' increased by 18.8% compared to the previous year. 'Educational Services' also increased by 19.9% compared to the previous year due to the base effect from academy closures and school reopening delays in the first quarter of last year.

On the other hand, as travel and movement restrictions are still recommended, the use of transportation means such as airlines, railways, and buses decreased, causing 'Transportation' to decline by 34.8% compared to the previous year. 'Accommodation and Food Services' decreased by 11.9% compared to last year due to travel and movement restrictions and reduced private gatherings and company dinners. However, the decrease rate for 'Accommodation and Food Services' narrowed by 9.2% compared to the fourth quarter of last year, showing signs of improvement.