Interest rates on credit card loans have surged to their highest level since 2022 in South Korea, as card companies manage loan balances amid tightening oversight on household debt by financial authorities.

According to the Credit Finance Association on Sunday, the average interest rate on card loans issued by nine major credit card companies reached 14.83 percent in March.

The figure is up 0.19 percentage point from 14.64 percent in February and 0.37 percentage point higher than the 14.46 percent recorded a year earlier.

It is the highest level since December 2022, when rates spiked to 14.84 percent during a liquidity crunch following a bond default by the Legoland Korea developer.

Amid total household loan caps set by authorities, card companies have been tightening card loan supply, placing upward pressure on interest rates.

Early this year, authorities requested loan management targets from firms, which reportedly forecast annual growth of just 3–5 percent.

Despite a decline in funding costs, lenders have kept rates high in line with broader efforts to rein in household credit.

This trend has deepened the burden on financially-vulnerable borrowers.

Credit finance bond rates—used to fund card loans—have fallen from over 6 percent in November 2022 to under 3 percent this year.

However, the average card loan rate for borrowers with credit scores below 700 points rose to 17.66 percent in March from 17.34 percent. For those with scores above 900, the rate held steady at 11.89 percent.

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