Card Loan Use Tops 28 Trillion Won in H1, Up 21%
Credit card loan use reached 28 trillion won, or approximately $20.28 billion, in the first half of this year, surging nearly 21% from a year earlier as tighter bank lending standards drove more borrowers to turn to card loans for stock investments and living expenses.According to the Financial Supe
In the first half of 2026, credit card loan utilization surged to 28 trillion won, roughly $20.28 billion, marking a 21% increase compared to the previous year, according to data released by the Financial Supervisory Service on August 27. This spike in card loan usage was primarily driven by tighter lending standards imposed by banks, compelling borrowers to seek alternative financing options for stock investment and everyday expenses.
Dedicated credit card companies extended a total of 56.1 trillion won in credit card loans during the same period, representing a 9% rise from the prior year's 51.5 trillion won. Card loans alone accounted for a 20.9% growth, while short-term cash advances declined by 0.8% to 28.1 trillion won. The surge in card loans was attributed to the need for "debt-financed investing" in response to stock market fluctuations, as more individuals opted for the readily available funds provided by credit cards over the more stringent regulations imposed on bank loans.
Online forums suggest that some investors are utilizing card loans to compensate for investment shortfalls, while a significant portion of demand stems from the need to cover living expenses during the economic downturn. Small business owners and low-income households, who have often been denied bank loans, are increasingly turning to credit cards as their last resort for immediate financial assistance.
Despite the higher loan usage, dedicated credit card companies recorded a combined net profit of 1.29 trillion won, up 68.3 billion won or 5.6% year-on-year. Additionally, total credit and debit card spending reached approximately 635 trillion won, reflecting a 6.7% increase year-on-year, which bolstered the companies' profitability.
The delinquency rate on total receivables held by card issuers remained stable at 1.54%, while the ratio of nonperforming loans decreased slightly to 1.13%, staying within a stable range. The loan-loss provision coverage ratio, which indicates a company's ability to absorb losses, was 105.6%, slightly lower than the previous year but still above the regulatory threshold of 100%.
All card companies maintained capital adequacy levels well above the required 8%, as indicated by their adjusted equity capital ratio of 20.8%.
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