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South Korea’s credit card spending climbed 6.3 percent

South Korea’s credit card spending climbed 6.3 percent on-year in January, the slowest pace in 45 months apparently due to the government’s tightening of credit card rules, data showed Monday.

Purchases made with credit cards totaled 43.1 trillion won (US$ 39.5 billion) in January, compared to 40.5 trillion won tallied the previous year, according to the data by the Credit Finance Association (CREFIA).

The data include spending with credit cards and debit and prepaid cards. Cash advances, overseas spending and card loans are not included.

The on-year gain came as the country’s consumer prices grew 1.5 percent in January, and more people used credit cards as the number of jobs in South Korea increased 1.4 percent over the cited period, CREFIA said.

However, the growth was limited following the government’s move to tighten credit card regulations to reduce the country’s record-high household debt.

The tougher regulations came as credit card firms have been under sharp criticism for charging far higher fees to small merchants than to large retailers, thus pocketing the excessive income.

Purchases at large discount stores plunged 13.2 percent on-year following government restrictions on their operating hours in an effort to support smaller retailers. Payments at smaller supermarkets, on the other hand, increased 8.5 percent over the cited period.

Spending at medical institutions moved up 8.8 percent from a month earlier as the country’s health authorities issued an influenza warning in January, noting that the seasonal flu has become pandemic.

Meanwhile, debit cards accounted for 15.7 percent of the total card purchases in January, while credit cards accounted for 84 percent.

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