Over the past two decades, South Korea has morphed from a country of savers into a nation of spenders and borrowers. Jeong Young Sik, an economist at the Samsung Economic Research Institute in Seoul who tracks household debt, found that Koreans in 1990 saved on average 22.2 percent of their net household incomes; by 2012 that figure had dropped to 3.4 percent. The ratio of household debt to disposable income in 2012 was 160—higher than the ratio of 130 in the U.S. in 2007, before the housing bubble burst.
One 40-year-old housewife from Suwon, south of Seoul, who would only comment by e-mail if her name wasn’t used, likened her credit card debt to a shackle on her leg. Her balances were so big that to pay them she says she turned to illegal private loan services. She eventually worked with a local branch of the Credit Counseling and Recovery Service to regain control of her finances.