Korean companies cut corporate card spending amid weak business conditions

[Photo by MK DB]

Korean companies have reduced the use of corporate cards for business purposes likely due to deteriorating business conditions even as Covid-19 restrictions have lifted.

According to the Credit Finance Association on Wednesday, the approved amount of all card payments through Shinhan Card, Samsung Card, KB Kookmin Card, Lotte Card, Woori Card and Hyundai Card in April totaled 93.9 trillion won ($72.13 billion), a 4.1 percent increase from a year ago.

While the approved amount for personal cards in April increased by 5.3 percent to 77.2 trillion won versus a year ago, spending through corporate cards fell by 1.5 percent to 16.8 trillion won.

Corporate cards also saw a significant decrease in average approved amounts alongside personal cards. In April, the average approved amount for all cards fell by 2.9 percent to 41,031 won compared to the same month last year.

For personal cards, the average approved amount fell by 1.9 percent to 35,766 won, while those for corporate cards, the figure dropped by a substantial 4.3 percent to 128,704 won.

The decrease in approved amounts for corporate cards and the decrease in average approved amounts indicate that companies are tightening their belt in anticipation of deteriorating business performance.

In April, the total approved amount for all cards decreased by 2.4 percent compared to the previous month. The average approved amount for personal cards fell by 2.1 percent from a month ago, while corporate cards fell by 0.9 percent.