Annual Card Approvals Surpass First 1,000 Trillion Won... Travel and Accommodation Up

120 Trillion Increase Compared to Same Period Last Year
Notable Growth in Travel and Accommodation Sectors

[Asia Economy Reporter Minwoo Lee] Last year, the total card approval amount surpassed 1,000 trillion KRW for the first time in history. This is attributed to increased sales in the accommodation and food service sectors and improved performance in travel-related industries.

According to the Credit Finance Association on the 31st, the total card approval amount in the fourth quarter of last year was 282.5 trillion KRW, an 8.4% increase compared to the same period the previous year. The number of approvals also rose by 7.1% to 6.61 billion transactions during the same period. As a result, the total card approval amount for last year reached 1,097.7 trillion KRW, increasing by 120.6 trillion KRW (12.3%) from the previous year, surpassing 1,000 trillion KRW for the first time ever.

Although the year-on-year growth rate was lower than that of the third quarter (amount 15.8%, number 11.5%), this is believed to be due to the base effect from the implementation of the COVID-19 coexistence national support fund in the fourth quarter of 2021. Additionally, ongoing concerns about an economic slowdown are also considered to have influenced this trend.

In the increase of card approval amounts in the fourth quarter of last year, sectors closely related to consumption showed particularly notable growth. The transportation sector's approval amount in the fourth quarter was 4.09 trillion KRW, a 65.3% increase compared to the same period the previous year. This is attributed to increased travel and mobility, as well as the base effect from low usage of aircraft and other transportation in the fourth quarter of 2021. As sales in travel-related sectors recovered, the approval amount in the business facility management and business support services sector also rose by 30.7% year-on-year to 1.18 trillion KRW.

Wholesale and retail trade also increased by 10.7% year-on-year to 153.78 trillion KRW. This is analyzed as a result of continued growth in non-face-to-face and online purchases, along with increased sales in department stores and vehicle fuel. With gatherings and company dinners returning to normal, the accommodation and food service sectors showed the second steepest growth, with card approval amounts rising 19.9% year-on-year to 38.25 trillion KRW.

Meanwhile, among the card approval amounts in the fourth quarter of last year, the proportions of credit cards and check cards were 78.4% and 21.3%, respectively. The credit card share increased by 0.3 percentage points compared to the same period the previous year.

Jang Myunghyun, Senior Researcher at the Credit Finance Association, explained, "We believe that the consumption increase trend is continuing, supported by sustained growth in accommodation and food service sales, activation of domestic and overseas travel, and improved performance in travel and leisure-related industries such as transportation."

On the 20th, ahead of the Lunar New Year holiday, Incheon International Airport Terminal 1 duty-free area is bustling with travelers preparing to depart. Photo by Jinhyung Kang aymsdream@