Based on a statement released by the financial regulator Thursday, Korean credit card firms' earnings increased an astonishing forty-six percent compared to the year before.  According to a Financial Supervisory Service report, the accumulated net profit of six local credit card companies increased from 1.86 trillion won in 2009 to 2.72 trillion won in 2010. 

The dramatic increase can be attributed to Samsung Card Co. earning 607.5 billion won by selling off its share holdings of affiliated companies and Shinhan Card Co. receipt of 195.5 billion won in tax refunds. 

Besides the reported onetime gains, earning figures for the six firms remain fairly stagnant.  The report indicated that one of the six card firms, Hana Financial Group Inc.'s joint business venture with SK Telecom Co., reported a loss of 58.9 billion won.  Its loses can be attributed to sustaining operation costs required in 2009. 

Default rates for the six credit card companies decreased slightly from the year prior.  According to the FSS, default rates went down from 1.83 percent in 2009 to 1.68 percent in 2010. 

On the contrary, credit card transactions volumes have increased 9.9 percent from a year earlier.  Based on information from the FSS, total credit card spending reached 517.4 trillion won last year.  The regulator also indicated that the number of credit cards in circulation increased 11.5 percent compared to the year before at a total of 85.14 million cards in use. 

Although the numbers indicate a financially sound industry, analyst fear that growing competition may be a damaging factor with credit card companies.  The FSS said, "Card firms’ increasing competition to win over customers and provide more gifts has recently led to an increase in card loan issuance, which is riskier assets compared to credit purchase.”