What it is and where it came from
Revolving credit took off when Bank of America mass-mailed BankAmericards in Fresno, California in 1958. In Korea, 'payment revolving' lets cardholders pay a set percentage of the bill and carry the rest. Balances grew from 5.39 trillion won at end-2020 to 6.67 trillion in July 2022, averaging about 2.4 million won per user (Financial Services Commission et al., 2022).
The real cost
In Q2 2022, average revolving fees ranged from 14.1% to 18.4% by issuer, above card-loan rates of 12.1–13.9%; late payments add three percentage points. Pay 10% of a 1-million-won bill while spending 500,000 a month, and the carried balance passes 1.5 million within three months even before fees, which then compound.
Why people get stuck
Laibson (1997) explained the endlessly postponed 'I'll pay next month' with hyperbolic discounting; Meier and Sprenger (2010) found present-biased people borrow more; Stango and Zinman (2009) showed people underestimate compounding. Ausubel (1991) argued card rates stay high because borrowers believe they won't borrow, and Gross and Souleles (2002) found higher limits raise debt. See behavioral economics.
Regulation
Over half of Korean complaints were from people who did not realize they had signed up. In August 2022 regulators introduced a dedicated disclosure sheet, channel-specific explanations, follow-up calls for older customers sold by phone, and tiered minimum-payment ratios. In the US, Agarwal et al. (2015) found the 2009 CARD Act's fee limits cut costs without offsetting increases.
How to get out
- Check in your card app whether revolving is on.
- Set the payment ratio to 100% or cancel it; repay the existing balance separately.
- If debts pile up, look at debt restructuring or individual rehabilitation.
FAQ
- Does revolving hurt my credit score?
- Large, persistent balances count as debt and can lower it.
- How do I cancel?
- Through the card app or call center, or raise the ratio to 100%.
Sources reviewed: 2026-11-02
References
- Ausubel, L. M. (1991). The failure of competition in the credit card market. The American Economic Review, 81(1), 50–81. Classic study of why card rates stay high when funding costs fall.
- Gross, D. B., & Souleles, N. S. (2002). Do liquidity constraints and interest rates matter for consumer behavior? Evidence from credit card data. The Quarterly Journal of Economics, 117(1), 149–185. Credit-limit increases raise debt; people hold cash and costly card debt at once.
- Meier, S., & Sprenger, C. (2010). Present-biased preferences and credit card borrowing. American Economic Journal: Applied Economics, 2(1), 193–210. Present-biased people carry more card debt.
- Stango, V., & Zinman, J. (2009). Exponential growth bias and household finance. The Journal of Finance, 64(6), 2807–2849. People systematically underestimate compounding debt.
- Agarwal, S., Chomsisengphet, S., Mahoney, N., & Stroebel, J. (2015). Regulating consumer financial products: Evidence from credit cards. The Quarterly Journal of Economics, 130(1), 111–164. Evaluates the US CARD Act's fee limits.
- Laibson, D. (1997). Golden eggs and hyperbolic discounting. The Quarterly Journal of Economics, 112(2), 443–478. Hyperbolic discounting explains saving and card borrowing at once.
- 금융위원회·금융감독원·여신금융협회. (2022). 신용카드 결제성 리볼빙 서비스 개선방안. Korean regulators' 2022 plan to reform card revolving.