[신용카드] Rising Credit Card Delinquency and Increasing Debt Rollovers Signal Alarm for Card Issuers' Financial Health

Rising Credit Card Delinquency and Increasing Debt Rollovers Signal Alarm, Korea Credit Market

 

Korea News from May 2024

Rising Credit Card Delinquency and Increasing Debt Rollovers Signal Alarm for Card Issuers' Financial Health

The scale of card debt rollovers, where debt is taken to repay other debts, has increased by 600 billion KRW in a year. The triple burden of high inflation, high interest rates, and economic recession has caused a surge in the number of people unable to repay their credit card bills. The delinquency rate is also rising, raising alarms about the financial health of credit card companies.

According to the Credit Finance Association and the Financial Supervisory Service, the balance of card loans from nine card companies last month was a record high of 39.9644 trillion KRW. This is an increase of 2.7051 trillion KRW compared to April of last year (37.2593 trillion KRW). As commercial banks and savings banks raise the bar for loan approvals to manage financial soundness, more people are turning to card loans. Card loans are favored by the public due to their simplicity compared to general credit loans.

Card loans have an average interest rate of 14.26% (as of last month), making them highly profitable. However, since most card loan users have medium to low credit scores, a spike in delinquency rates raises concerns about financial soundness. Higher delinquency rates mean credit card companies must increase their loan loss provisions, which in turn reduces net profit.

In the first quarter of this year, Hyundai and Samsung Card had delinquency rates of 1.04% and 1.16%, respectively, while Hana, Woori, and KB Kookmin Card exceeded 2%. The amount of delinquent debt over one month from eight major card companies (Shinhan, Samsung, Hyundai, KB, Lotte, Woori, Hana, and BC) surged from 1.2216 trillion KRW in December 2021 to 2.0924 trillion KRW in December last year. Notably, debt delinquent for over six months, considered uncollectible, increased by 65.5%, from 113.5 billion KRW to 187.9 billion KRW over the same period.

The balance of card loan rollovers from seven major card companies reached 1.7441 trillion KRW, nearly 600 billion KRW more than the same period last year (1.1448 trillion KRW). An increase in rollover balances indicates a rise in bad loans, which could compromise the financial health of card companies. Indeed, the global credit rating agency Moody's recently downgraded the credit outlook for KB Kookmin Card from "stable" to "negative."

Key Vocabulary with Definitions

• Delinquency Rate: The percentage of loans in which borrowers are late on their payments.
• Debt Rollovers: The practice of taking on new debt to repay existing debt 대환대출
• Credit Finance Association: An organization that oversees the credit finance industry. 여신협회
• Financial Supervisory Service: A government agency that supervises financial institutions. 금감원
• Card Loan: A type of loan issued by credit card companies.
• Loan Loss Provisions: Funds set aside by financial institutions to cover potential loan losses. 대손충당금
• Net Profit: The actual profit after working expenses not included in the calculation of gross profit have been paid.
• Credit Rating Agency: A company that assigns credit ratings, which rate a debtor's ability to pay back debt.
• Moody's: A global credit rating agency.

 

2024년 5월 신용카드 뉴스

카드 연체율 오르고 돌려막기 급증… 카드사 건전성 ‘빨간불’

빚을 내서 빚을 갚는 카드 대환대출 규모가 1년 사이 6000억원 증가했다. 고물가·고금리·경기침체 삼중고로 카드값을 갚지 못하는 서민이 급증한 것이다. 연체율도 점점 높아지고 있어 카드사들의 건전성에 비상이 걸렸다.

24일 여신금융협회·금융감독원에 따르면, 지난달 9개 카드사의 카드론 잔액은 역대 최대치인 39조9644억원으로 집계됐다. 지난해 4월(37조2593억원)과 비교하면 1년 사이 2조7051억원이 증가한 셈이다. 시중은행과 저축은행 등 금융권이 건전성 관리에 나서며 대출 문턱을 높이자 카드론을 찾는 서민이 많아진 것이다. 카드론은 일반 신용대출보다 대출이 간편해 서민의 급전창구로 손꼽힌다.

카드론은 평균 금리가 14.26%(지난달 기준)에 달할 정도로 수익성이 높은 상품이다. 하지만 카드론 이용자 대부분이 중·저신용자라 연체율이 치솟으면 건전성 우려가 높아지는 양날의 검이다. 연체율이 높아지면 카드사는 대손충당금을 더 쌓아야 하고, 대손충당금이 늘어나면 순이익은 줄어든다.

올해 1분기 현대·삼성카드 연체율은 각각 1.04%와 1.16% 수준이지만, 하나·우리·KB국민카드는 2%를 넘긴 상황이다. 8개 전업카드사(신한·삼성·현대·KB·롯데·우리·하나·비씨)의 1개월 이상 연체액 규모는 2021년 12월 기준 1조2216억원에서 지난해 12월 2조924억원으로 급증했다. 특히 회수가 불가능한 것으로 여겨지는 6개월 이상 연체액은 같은 기간 1135억원에서 1879억원으로 65.5% 증가했다.

특히 7개 전업카드사 카드론 대환대출 잔액은 1조7441억원으로 전년 동기(1조1448억원)보다 6000억원 가까이 늘었다. 대환대출 잔액이 늘어난다는 것은 부실 대출이 늘어났다는 뜻으로, 카드사들의 건전성에 문제가 생길 수 있다. 실제 글로벌 신용평가사 무디스는 최근 KB국민카드의 신용등급 전망을 ‘안정적’에서 ‘부정적’으로 하향 조정했다.