CARDS & PAYMENTS | Staff Reporter, Korea

South Koreans in 20s face $1.91b in overdrafts, card loans

Thousands are applying for debt workouts.

South Koreans in their 20s face bank overdrafts and credit card loans amidst a job crunch sparked by the country’s economic slump, reports Yonhap News Agency, based on data prepared by the Financial Supervisory Service for an annual parliamentary audit.

Outstanding overdrafts and card loans extended to local twenty-somethings totalled approximately US$1.91b (2.15 trillion won) as of the end of June this year, the data showed.

The amount is up from $1.84b (KRW2.08t) from end-2019.

Outstanding loans take up the largest portion of the total, at $1.85b (KRW2.07t).

Increased debt has caused many to apply for debt workouts, the report noted. In 2019, nearly 12,500 Koreans in their 20s reportedly sought to work out their debt through the Credit Counseling & Recovery Service.

The age group's growing debt comes as a prolonged economic slowdown has made it more difficult for them to find decent jobs, noted Yonhap.

The unemployment rate in South Korea for citizens aged between 15 and 29 hit 8.9% in September, up 1.6 percentage points (ppt) on-year. This is also more than double the country's overall jobless rate of 3.6%.

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