Tuesday, October 12, 2004


According to the Korea Herald.
The reports submitted to the National Assembly's Finance and Economy Committee by the Finance Ministry, Financial Supervisory Service and Korea Association of Information & Telecomm. showed that some 4.81 million people, or one-fifth of the nation's workforce, are effectively credit delinquents.

The data shed new light on the scale and scope of individuals' debt, a byproduct of a credit binge encouraged by the government after 2000 to lift the economy. Weak consumer spending has weighed on the nation's growth since early last year, with little signs of relief.

As of the end of August, 331,845 people were at least one year in arrears on their tax payment worth 5 million won or more.

Another 1.48 million Koreans were defaulting on their telecom bills, while 921,250 people were unable to pay department store card bills.

Troubling news for the long-term health of the ROK economy. But is the ROK all that different from the U.S.? Consider the following stats and decide for yourself:
Some 1.6 million U.S. households -- one of every 73 -- filed for bankruptcy in 2003.

There are roughly 1.2 billion credit cards in use in the United States.
Average per household debt in the U.S., not counting mortgage debt, is about $14,500 -- especially noteworthy because before the 1930s, most middle and working class people had no major debts. Banks would not lend to them; they rented their homes and if they did own a house, it was paid for as it was being built.
Some 40 percent of American families annually spend more than they earn.

About 60 percent of active credit card accounts are not paid off monthly.

Average credit card debt among all American households is $8,400.

Average card debt among people who have at least one card is $9,205 -- triple what it was in 1990.

Average personal wealth of a 50-year-old American, including home equity: less than $40,000.

A typical American family today pays about $1,200 annually in credit card interest.

The average interest rate on credit cards is 18.9 percent.

Last year the credit card industry took in $43 billion in card fees.

Nine of 10 Americans claim credit card debt has never been a source of worry.

But 47 percent would refuse to tell a friend how much they owe.

Twenty-three percent of Americans admit to maxing out a credit card.

Eleven percent of Americans admit card debts went to collection.

Thirteen percent of Americans have been 30 days late paying credit card bills in the past year.

The average graduate student has six credit cards and one in seven owes more than $15,000.

People using credit cards in fast food restaurants spend up to 50 percent more than when they pay cash.

The personal savings rate in the United States has dropped from 8 percent in the 1980s to just under 2 percent since 2000.
Get out the scissors and cut 'em now folks, before it is too late!

Does the figure of $14,500 also exclude a car loan? If it doesn\'t, the figure of $14K doesn\'t look so bad.
It isn't clear whether the 14K figure includes auto loans or not. I suspect not given that most of the language focues on credit card debt and few auto dealers would allow a customer to buy a car on their Visa card. But you're right that if it does include auto loans, the number isn't that bad.
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