Koreans' Overseas Credit Card Spending Hits Record High

The amount of money that Koreans charge to their credit cards overseas is snowballing every year. That's mainly because the number of Koreans who travel overseas is surging by 20 percent every year, and they're spending more because of the stronger won.

The Bank of Korea announced Tuesday that the amount of South Korean residents' overseas credit card spending reached US$1.45 billion in the first quarter this year. That's a new record high, and an increase of 34.3 percent year-on-year.

The number of Koreans who used credit cards overseas in 2006 totaled 1.97 million, up 23.8 percent compared with the same period last year. Each person spent an average of $712 via credit card, up 8.5 percent from a year earlier.

The number of Koreans who went to foreign countries increased by 20.2 percent to 3.31 million, and Koreans are spending more since the U.S. dollar depreciated nearly four percent against the won, the central bank said. Overseas credit card spending by Koreans is increasing by 30 percent every quarter year-on-year regardless of seasonal factors such as vacations or holiday seasons.

However, credit card spending by foreign visitors in Korea is declining, since their number has decreased and prices in Korea are higher due to the strong won. In the first quarter, credit card spending in Korea by foreigners fell by 4.1 percent to W497 million (US$1=928) year-on-year. Each foreigner spent an average of $405 via credit card. That's 57 percent less than the $712 that each Korean charged overseas during the same period. Until 2000, Koreans and foreigners spent similar amounts of money in and out of Korea.

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