In the aftermath of the economic crisis of 1997-98 South Korea has undertaken several measures to deal with prudential problem relating to credit cards. This study attempts to find out why the credit cards have been a disaster in South Korea.

Credit cards have made life easier and simpler. Just go in to any restaurant or a shopping mall and that too without carrying any money in your wallet. Enjoy a tour of your favorite foreign location and buy whatever you like without bearing the stress of carrying cash. Credit cards have completely solved the problem of carrying cash or travellers cheques during travels, shopping, and dining to maintain a few. Just name it and get it with the help of this plastic money. Technologies have made life much easier.

Credit cards have been in use for more than 80 years. US merchants started to issue credit cards to their loyal customers in the early 1920s. Since then, there had been a great deal of evolution in the type and usage of credit cards. Today, credit cards have become as commonplace as cheques and passbooks. In such a scenario, it's hard to believe that credit cards also have the power to downturn the whole economy of a country causing economic and social damages, if not used with proper fiscal measures. This is what exactly happened in South Korea, during a four year period i.e., between 1999 to 2003.

The South Korean credit card industry and the economy suffered a painful blow in 2003. It was a major credit card fiasco throughout the country with thousands of citizens committing suicide to avoid the burden of debt and the fear of bankruptcy. By and large, a debt free then in 1997, South Korean households in 2005 are under a debt of an average $27,000.

Treasury Management Journal, Korea Asset Management Corporation, KAMCO, Economic Turmoil, Credit Cards, Fiscal Measures, Domestic Economy, Korean Government, Korean Policy Makers, Annual Income, Financial Institutions, Automatic Teller Machines, Economic Turmoil, Samsung Economic Research Institute, Bankruptcy Laws.