Seoul - Yonhap
One in every four credit cards issued in South Korea is not in use as heated competition among credit card firms has resulted in excessive card issuances, data showed Monday. The number of credit cards unused for payments for 12 months reached 32.9 million as of end-June, up 1.66 million from six months earlier and 25 percent of the 122.3 million cards outstanding, according to the data by the Financial Supervisory Service (FSS) and the Credit Finance Association (CFA). The number of dormant credit cards has been on the rise since 2008, when it hit 25.7 million, with the figure expected to surpass 35 million by the end of this year. Industry watchers said excessive competition among credit card companies has led to the increase of idle plastic money, only leaving the firms with more profits from annual membership fees. Given the minimum annual fee for credit cards is 10,000 won (US$9.30), credit card issuers can fetch a combined 150 billion won from unused cards, they said. In a bid to prevent excessive card issuance, the FSS, the country\'s financial watchdog, made it compulsory for credit card firms to require card users to pay the annual fee, following the country\'s credit card bubble in 2003. The Financial Services Commission (FSC), the decision-making body for the FSS, said in a statement that it has launched a task force to cap the rise in unused credit cards and prevent side effects stemming from the increase. The task force is charged with coming up with an effective countermeasure by the end of October, the FSC said. South Korea\'s financial regulators have been stepping up efforts to put a lid on card issuances as part of its efforts to curb excessive card loan growth. The FSS has been conducting weekly reviews of credit card companies on a number of categories such as loan increases and marketing costs, in a bid to limit the on-year growth of card firms\' lending and individual users\' limits to 5 percent. The 5 percent ceiling is based on the average growth rate of households\' disposable income over the last five years, which stands at 5.1 percent.