Popular culture in South Korea is one of the themes of the Blog. Over the years, I have seen Korea shift from a cash culture to a credit card culture. Other than small business owners who still do lots of cash business, Koreans use credit cards extensively. One dimension is that Korea is very wired (Internet) and busy culture...the convenience of using a Samsung or Hyundai adds to their usage.
Korea Media notes...
Nearly seven out of 10 South Koreans own a credit card, posting the second-highest credit card ownership rate in the world, according to Nielson Media Research, a global media research firm.
The countrys credit card ownership rate currently stands at 68 percent, the highest in the Asia Pacific region. South Koreans rank closely behind the British, where credit card penetration rate is 70 percent, the firm said. [ I never knew Brits were ranked so high on credit card ownership. Wonder why?]
South Koreans are among the worlds biggest credit card users, largely the result of relaxed ownership criteria and the governments strong encouragement of the cards as a payment method, Helen Pemberton, a Nielson director, said in a press release. South Koreans don’t go shopping without at least one credit card in their wallet.
The countrys credit card ownership rate is higher than the U.S.’s 65 percent, Hong Kong’s 58 percent, Singapores 44 percent and Taiwan’s 36 percent. The figures for China and India are 7 percent and 3 percent, respectively.
Unlike other consumer products, credit card penetration rates are a reflection of a number of factors, such as the development of the banking sector, local banking regulations, the sophistication of consumers and the credit-worthiness of cardholders, Nielson said.
The firm said card issuers tightened their lending criteria following the Asian financial crisis, but the race is on for banks to reach new customer bases and deepen their relationships with existing customers.
Hyundai Card, Samsung Card and BC Card are among the top 10 spenders for advertising in the world, it said.
Since credit cards were introduced to Korea in the early 1980s, their use has expanded substantially. As of the end of March, over 83 million cards were in circulation, according to the Credit Finance Association, the lobby group for card issuers.
[ BTW The downside of such high credit card issuance was a huge number of defaults, a situation that has improved in the past two years.]
You should know that in Korea 'cheques','debit cards' or 'switch' don't exist. SO the only way to pay other than in cash is by credit card. Knowing this will give you a totally different perspective of credit card usage in Korea.
ReplyDeleteCredit cards are also used as store cards with loyalty point schemes and you get discounts depending on which brand of card you pay with.
One should certainly not draw any conclusions about the Korean economy based on levels of CC ownership in comparison to other countries. Banks used to hand out CC like sweets and I know people who still have 20 or more cards from back then when you got a 20% discount on whatever you bought if you signed up there and then...