Card companies’ loan balances up for two straight months in Nov.

(Yonhap)

South Korean credit card loan balances rose for a second straight month in November, posting the highest on-month growth rate in more than a year, data showed on Monday.

According to the Credit Finance Association on Monday, the outstanding balance of card loans at nine credit card companies stood at 42.6 trillion won ($29 billion) at the end of November, up 1.14 percent from the end of the previous month.

The nine card companies are Lotte, BC, Samsung, Shinhan, Woori, Hana, Hyundai, KB Kookmin, and NH NongHyup.

The on-month growth rate was the highest in more than a year since 1.28 percent in October 2024.

Card loan balances had declined for four straight months from June to September, following the Financial Services Commission’s announcement on June 27, 2025, of household debt management measures aimed at cooling an overheated real estate market.

The regulator capped credit loan limits at 100 percent of annual income and included card loans in the regulation.

Card loan balances fell to their lowest level in a year as of the end of September in 2025, due in part to the impact of write-offs of non-performing loans at the end of the quarter.

However, balances rose by 0.57 percent on month in October, and the growth rate increased further in November.

The outstanding balance of refinancing loans – where borrowers take out new loans from the same card company to repay existing card loans – also rose for two consecutive months from 1.36 trillion won in September to 1.42 trillion won in October and to 1.5 trillion won in November.

Industry observers attributed the increase to rising demand for emergency funding as commercial banks tightened household loan quotas in the fourth quarter of last year.

“Card loans are largely used for emergency funding, and with the recent economic downturn and the difficulty of obtaining bank loans, demand for quick cash appears to have increased,” said an industry official.

Market watchers also pointed to a surge in retail stock trading, with the benchmark Kospi reaching 4,000, as encouraging debt-funded investments by individual investors.

Seasonal factors, including deferred borrowing linked to Chuseok holiday bonuses, may also have supported November’s rise.

Despite the recent uptick, analysts expect continued pressure on the card industry.

Noh Hyo-sun, a senior researcher at Korea Investors Service, said lower merchant commission fees have eroded core revenue, while tighter regulations are limiting lending growth.

“Capital adequacy requirements will remain strict this year,” Noh said.