Credit and debit card purchases totaled 635.3 trillion won in the first half, up from 595.7 trillion won a year earlier, according to the Financial Supervisory Service. The figures cover eight standalone card companies and 11 banks that also issue cards.
Borrowing rose much faster. Total card lending increased 9 percent to 56.1 trillion won. Long-term card loans, commonly known in Korea as card loans, surged to 28 trillion won from 23.2 trillion won a year earlier.
Short-term card loans, or cash advances, moved in the opposite direction, falling 0.8 percent to 28.1 trillion won. That means almost all of the increase in card borrowing came from longer-term card loans as individuals moved to secure loans before the rates went higher.
Borrowing has already has become more expensive. The average card-loan rate at the eight standalone issuers rose to 14.15 percent in July from 13.87 percent in June, crossing 14 percent for the first time in nine months, according to the Credit Finance Association (CREFIA).
Thursday's interest-rate hike could add to borrowing-cost pressures over time. The Bank of Korea raised its benchmark rate to 3 percent, with card loans already up 20.9 percent from a year earlier and the average card-loan rate at 14.15 percent in July.
Higher funding costs have contributed to the increase. Unlike banks, card companies do not take deposits and rely heavily on bonds to raise money for lending. Higher market rates can therefore increase their funding costs and eventually put upward pressure on card-loan rates. Rising delinquencies have also increased the need for issuers to manage credit risk.
Signs of repayment difficulty also increased slightly. The share of card loans overdue by at least one month rose to 3.35 percent at the end of June from 3.21 percent at the end of last year. The delinquency rate for card purchases and card loans combined rose to 1.61 percent from 1.54 percent.
That does not mean card issuers themselves are becoming financially unstable. The share of their receivables classified as being at higher risk of loss fell to 1.13 percent from 1.15 percent at the end of 2025. The FSS said overall asset quality remained stable and card companies had generally adequate capacity to absorb losses.
Card companies also remained profitable. The eight standalone issuers posted a combined net profit of 1.2934 trillion won in the first half, up 5.6 percent from 1.2251 trillion won a year earlier.
The higher profit was not driven by card lending. Card-loan revenue fell by 50.5 billion won, while fees from card purchases at merchants increased by 196.3 billion won and installment-payment fee revenue rose by 100.2 billion won. The FSS said increased credit-card purchases were among the factors lifting profits.
Insurance companies also posted higher profits, although life and non-life insurers showed different trends in their insurance businesses.
The country's 52 insurers, including 22 life insurers and 30 non-life insurers, earned a combined 9.0138 trillion won in the first half, up 13 percent from a year earlier. Life insurers' net profit rose 17.7 percent to 3.9254 trillion won, while non-life insurers' profit increased 9.6 percent to 5.0884 trillion won.
Life insurers, however, earned less from insurance operations. Insurance profit fell 26.2 percent to 1.9297 trillion won from 2.6147 trillion won a year earlier. The regulator said the decline reflected higher costs from loss-making contracts and larger losses when actual insurance results differed from previous estimates.
Investment earnings more than offset the decline. Life insurers' investment profit jumped 51.6 percent to 2.6803 trillion won, helped by higher interest and dividend income and gains on financial assets. Insurers make up the bulk of institutional players in the equity and bond market.
Life insurers collected 65.2045 trillion won in premiums in the first half, up 8.4 percent from a year earlier.
Premium income from protection products rose 10.8 percent, while variable insurance premiums increased 3.9 percent and retirement pension-related premiums climbed 18.4 percent, reflecting high wage-earners seeking safe non-bank haven to park their income.
Savings-type insurance was the only major category to decline, falling 1.3 percent to 14.1928 trillion won.
Non-life insurers performed better in their core insurance business. Insurance profit rose 14 percent to 4.3261 trillion won, while investment profit increased 10.2 percent to 2.7601 trillion won. Premiums also increased across all major business lines, including long-term and automobile insurance.
Key Takeaways
• South Korean card borrowing grew far faster than spending in the first half of 2026. Long-term card loans jumped 20.9 percent on year to 28 trillion won, while credit and debit card purchases rose 6.7 percent to 635.3 trillion won, according to the Financial Supervisory Service.
• The average card-loan rate at South Korea's eight standalone card issuers reached 14.15 percent in July 2026, while the card-loan delinquency rate rose to 3.35 percent at the end of June from 3.21 percent at the end of 2025.
• South Korean financial companies remained profitable despite signs of pressure among some card borrowers. Eight standalone card issuers posted a 5.6 percent increase in first-half net profit, while 52 life and non-life insurers earned a combined 9.0138 trillion won, up 13 percent on year. Life insurers' insurance profit fell 26.2 percent, but stronger investment earnings lifted their overall profit.
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