Recession Reality Check: How Unstable 20s Are Forcing a Generation to Rethink Credit Card Habits
Shift in Credit Card Usage Trends: Younger Generation Sees Decline, Older Generation Sees Increase
Recent data analysis reveals a significant shift in credit card usage trends among different age groups. While individuals in their 20s and 40s are decreasing their credit card usage, those in their 50s to 70s are showing an increase in credit card usage.
The decline in credit card usage among young people under 20 has been rapid, with a 9.0% decrease compared to the same period last year. In contrast, the total credit card usage amount increased by 0.8% during the same period. The age group of 50 and above has been showing a contrasting trend, with an increase in credit card usage compared to a year ago.
According to the analysis of the ‘Big Data Utilization’ data from Statistics Korea by the Woori Financial Management Research Institute, the increase in the total card usage amount was higher for those in their 50s (2.0%), 60s (7.1%), and 70s and older (15.3%). The data was analyzed based on the 12-week moving average to correct for temporary deviations in weekly card usage amounts and to grasp the overall trend.
The reason for the decline in consumption among the younger generation is attributed to the economic recession and sluggish employment. Jobs for those in their 60s and older increased by 263,000 compared to the same period last year, but jobs for those in their 20s and younger decreased by 102,000 compared to the same period last year.
An official from the Korea Finance Management Research Institute stated, “From the perspective of revitalizing the domestic economy, the economy will only recover if people in their 20s to 40s spend a lot. However, the quality of employment for them is currently poor, and it is particularly difficult for people in their 20s to have a stable income stream, so consumption has also plummeted.”
The year-on-year growth rate of weekly credit card usage has been on a downward trend since the first week of 2021. The growth rate exceeded 10% in April and May 2021, and last year, it maintained a year-on-year growth rate throughout the year. However, in April of this year, it recorded its first year-on-year decline, and since then, the growth rate has been limited to the 1% range.