[Exclusive] "My paycheck fell short, and I couldn't get a card loan either" More people in their 40s and 50s turn to 'cash advances'; "debt-investing woes" put long-term delinquency among those in their 20s and 30s on red alert

Cash advance usage among people in their 50s grew 9.96%, the highest since the second quarter of 2021
Card loan restrictions and economic slowdown shift demand toward short-term loans... “balloon effect”
Long-term delinquency rate highest among peop

Cash advances are a product with shorter repayment terms and higher interest rates than card loans. Depending on the card issuer and product, card loans can be repaid over a period of several years, while cash advances typically must be repaid within one to two months. Their average interest rate is also about 4 percentage points higher than that of card loans. In particular, the average annual interest rate on cash advances for users with credit scores of 700 or below was 19.2%, close to the statutory ceiling of 20% per year.

The number of people in their 40s and 50s using cash advances to raise emergency funds has risen sharply. The trend is believed to reflect increased demand for more expensive, short-term financing as high interest rates and a slowdown in the real economy have worsened income conditions, while financial authorities have tightened controls on card loans. Meanwhile, long-term delinquency rates among people in their 20s and 30s were high, partly due to “debt-financed investing,” or borrowing to invest, and other factors.

According to data titled “Growth Rates and Delinquency Rates for Cash Advances and Card Loans by Age Group at Seven Card Issuers (Hyundai, Lotte, Samsung, Shinhan, KB Kookmin, Woori and Hana), 2021–2026 (through the second quarter),” which the office of Rep. Choi Eunseok of the People Power Party received from the Financial Supervisory Service, the growth rate in cash advance use among people in their 50s was 9.96% in the second quarter of 2026, up 6.4 percentage points from 3.53% in the previous quarter. This was the highest growth rate since the second quarter of 2021, when domestic demand was hit by the COVID-19 pandemic.

Growth was also pronounced among people in their 40s. The growth rate in cash advance use among this group jumped from negative 0.63% in the first quarter of 2026 to 8.81% in the second quarter, returning to positive territory. Over the same period, growth rates for people in their 30s and those aged 20 or younger also turned positive, at 7.31% and 4.03%, respectively. The growth rate among people aged 60 and older was 6.94%. In other words, cash advance use increased across every age group in the second quarter. This contrasts with the same period last year, when cash advance use declined among the major age groups. By contrast, in the second quarter of 2026, card loan growth was negative among people aged 20 or younger and those in their 30s and 40s. It changed little from the previous quarter among people in their 50s, while only the 60-and-older group saw an increase.

The trend is believed to reflect a “balloon effect”: as financial authorities tightened controls on card loans to manage the total volume of household lending, demand for funds shifted to cash advances, which are more expensive and have shorter repayment periods. Demand for “debt-financed investing”—borrowing to invest in stocks—also grew amid a strong stock market, further driving up the use of cash advances as a source of emergency funds.

Cash advances are a product with shorter repayment terms and higher interest rates than card loans. Depending on the card issuer and product, card loans can be repaid over a period of several years, while cash advances typically must be repaid within one to two months. Their average interest rate is also about 4 percentage points higher than that of card loans. In particular, the average annual interest rate on cash advances for users with credit scores of 700 or below was 19.2%, close to the statutory ceiling of 20% per year.

As high interest rates persist, borrowers with limited financial flexibility are facing heavier repayment burdens. Long-term delinquency rates have been particularly high among people in their 20s and 30s, who often face major expenses for employment, marriage, childbirth and housing at a time when debt burdens are also mounting.

According to Rep. Choi’s office, the long-term delinquency rate for debts unpaid for six months or more was highest among people in their 30s. The rate for this group peaked at 0.64% in the third quarter of 2025 before falling to 0.40% in the fourth quarter, but it rose for two consecutive quarters this year. Among people aged 20 or younger, the long-term delinquency rate also increased from 0.36% at the end of 2025 to 0.40% in the second quarter of 2026.

For card loans, the long-term delinquency rate (six months or more) was highest among people aged 20 or younger. In the second quarter of 2026, their rate was 0.33%. People in their 30s and those aged 60 and older followed, both at 0.30%, while the rates for people in their 40s and 50s were 0.29% and 0.24%, respectively. The delinquency rates for debts overdue by one month or more in the second quarter were also higher among younger borrowers than among other age groups: for card loans, 2.61% among people aged 20 or younger and 2.60% among those in their 30s; for cash advances, 3.60% and 3.47%, respectively. Higher delinquency rates among people in their 20s and 30s mean that a relatively larger share of the money they borrowed is overdue.

The rise in delinquency rates among younger people is believed to reflect the growing burden of high-interest repayments at a time when their income and assets are not yet well established. Some younger people who invested with borrowed money are also believed to be facing heavier repayment burdens after incurring investment losses in the recent sharp stock market downturn. Indeed, data on outstanding margin loans by age group as of the end of June 2026 show that the balance for people in their 20s and 30s stood at KRW 4.1943 trillion, about 2.4 times the KRW 1.7607 trillion recorded at the end of 2024.

The KOSPI and KOSDAQ opened lower on the 20th. The KOSPI and won-dollar exchange rate are displayed on an electronic board in the dealing room at Hana Bank's headquarters in Jung-gu, Seoul. Yonhap News Agency

Concerns have been raised that continued long-term delinquency among people in their 20s and 30s—who generally have less accumulated wealth and less stable income—could also put pressure on card issuers’ financial soundness. “Long-term delinquency among young people can delay housing and asset building by lowering their credit ratings and limiting their access to financial services. It can also increase card issuers’ loan-loss expenses and weaken their profitability,” said Seo Jiyong, a professor of business administration at Sangmyung University and president of the Korea Credit Card Academic Society. “Rather than cutting lending across the board, card issuers should strengthen repayment-capacity assessments and early debt restructuring, while the authorities should coordinate these efforts with support for employment and income recovery.”

Rep. Choi also stressed, “Raising lending thresholds across the board is having the unintended consequence of pushing ordinary people toward high-interest, ultra-short-term emergency loans. Sophisticated financial support tailored to the vulnerabilities of each generation must go hand in hand with proactive oversight of financial soundness.”

This content was produced with the assistance of AI translation services.