Outstanding card loans at nine Korean card companies fell 457.7 billion Korean won from a record 43.2534 trillion won in late May to 42.7957 trillion won at the end of July, according to the Korea Credit Finance Association. Over the same period, cash services and revolving credit increased by a combined 597.3 billion won, exceeding the card-loan decline by 139.6 billion won. Cash services are short-term loans due on the next payment date, while revolving credit permits partial repayment and rolls over the unpaid balance. Both are excluded from DSR (Debt Service Ratio, a limit on debt-based borrowing) calculations, unlike card loans, potentially allowing borrowers restricted by existing debt to shift into more expensive products. Average annual rates were 14.1% for card loans and 18.2% for cash services among eight specialized card companies. For borrowers with credit scores below 700, cash-service rates reached 19.2% and revolving-credit rates 19%, close to the 20% legal maximum. Refinancing balances also rose to 1.648 trillion won in July, suggesting more borrowers were taking new loans to service existing debt. Authorities raised the household-loan growth target from 1.5% to 3% this month to protect housing-related lending and support youth and genuine borrowers, but card-loan restrictions remain. They are instead promoting mid-interest loans, whose second-half 2026 rate cap is 12.3%, although supply fell 7.6% in the second quarter as profitability, funding costs and credit risks weighed on lenders. The card industry warns that vulnerable borrowers could be pushed toward costlier debt or outside the formal financial system.