The effects of financial authorities' regulations on household loans have continued, resulting in a decline in card loan balances for the third consecutive month as of last month.
According to the Credit Finance Association on September 22, the card loan balance at the end of August for nine credit card companies (Lotte, BC, Samsung, Shinhan, Woori, Hana, Hyundai, KB Kookmin, and NH Nonghyup Card) stood at 42.4483 trillion won, down by 39.5 billion won compared to the previous month's 42.4878 trillion won.
It appears that the continued decline in card loan balances is due to the June 27 regulation, which limits the maximum amount of unsecured loans, including card loans, to within an individual's annual income.
Card loans are also subject to the third-stage stress-based Debt Service Ratio (DSR) regulation, which has been in effect since July.
The balance of cash advance loans also decreased to 6.2415 trillion won, down by 24.3 billion won from the previous month's 6.2658 trillion won.
However, the revolving payment balance, which can be carried over, saw a slight increase from 6.7872 trillion won to 6.7958 trillion won. The balance of refinancing loans-where borrowers take out new loans from the same card company after failing to repay existing card loans-also rose by 52.9 billion won to 1.5811 trillion won from the previous month's 1.5282 trillion won.
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