As consumer sentiment weakens, South Korean households are cutting back on education expenses—typically one of the last areas to be reduced.
Card spending on education services declined year-on-year in January for the first time since the COVID-19 pandemic, data from the Credit Finance Association showed on March 11.
Total card spending—including credit, debit, and prepaid cards—rose 3.2% in January from a year earlier to 102.6 trillion won ($76.8 billion). However, spending in the education services sector fell 5.5% to 1.74 trillion won. The category includes payments to kindergartens, schools, and private academies, known as “hagwons” in South Korea.
This marked the first annual decline in education-related card payments since January 2021, when spending dropped 12.5% amid pandemic disruptions. Compared with December, spending also fell by 10 billion won, or 0.6%.
Education expenses are usually one of the last areas to be cut, even in economic downturns. Until December 2024, spending in the sector had steadily increased year-on-year.
The steepest decline in card spending was in the transportation sector, down 7.6% to 1.65 trillion won. Spending also fell in accommodation and food services (-1.8%), arts, sports, and leisure services (-1.7%), healthcare and social welfare (-1.1%), and wholesale and retail (-0.1%).
An industry official noted that the extended Lunar New Year holiday in January may have temporarily skewed spending patterns, adding that longer-term trends need closer monitoring.
