In Q4 last year, approval amount for consumer-related industries decreased by 3.3%
Increased spending in transportation, travel agencies, and education expenses
‘The card usage amount for consumer-related industries saw a significant decline in the fourth quarter of last year. The illegal martial law of December 3 had a substantial impact on consumer sentiment. However, spending on overseas travel and education expenses was an exception.’
According to the Credit Finance Association on the 4th, the card approval amount for consumer-related industries in the fourth quarter of last year was 231.24 trillion won, a 3.3% decrease from the same period the previous year (239.08 trillion won). Consumer-related industries refer to eight sectors classified by the National Statistical Office as having a high relevance to consumer life, including wholesale and retail, transportation, and educational services.
In particular, card usage in wholesale and retail dropped sharply amidst the martial law and impeachment situations. The card approval amount for wholesale and retail in Q4 last year was 151.12 trillion won, a 6.3% decrease compared to the same period the previous year (161.13 trillion won), implying a reduction in goods purchases by more than 10 trillion won over the year.
However, with increases in domestic and international travel, including temporary holidays in early October, the performance of airlines and travel agencies improved, and private education expenses were not reduced, leading to an overall increase in card usage. The total card approval amount increased by 3.2% compared to the same period the previous year, reaching 309.8 trillion won. The transportation industry saw a 5.3% increase, and business facilities management and support services (including travel agencies) grew by 4.0%. Educational services card usage increased by 5.8%.
The rise in corporate card usage is also noteworthy. The corporate card approval amount was 56.7 trillion won, a 5.8% increase compared to 2023. An associate from the association explained, “Although consumer sentiment was subdued, the continued trend of price stability and the recovery of domestic car sales contributed to a gradual increase in card approval figures.”