Bank loans and credit card debts have risen 34.1% in a year to 424.3 trillion won (£222bn; $348bn) at the end of September.

Debts now make up three quarters of the country's gross domestic product, up from 63% a year ago.

Yet, the central bank director Choi Young-Youb insisted the high level of debts is not a threat to the economic stability of the country.

"I don't think household debt will repeat the recent sharp gains going forward," he said.

Government intervention

Average debts by a South Korean household has reached almost 30m won. Too high according to the government which is working hard to make people borrow less.

The government has asked banks to reduce lending and ordered credit card companies to set aside more cash to cover defaults on repayments.

Already, one in ten South Koreans are behind in making payments on their credit card debt.

Observers are concerned about a spike in personal bankruptcies which they fear could hurt the country's economy at large.

Reckless

South Korea's financial regulator has described some major lenders as reckless.

And the government has ordered credit card issuers to set aside 8% of outstanding loans to cover potential defaults, to write off debts older than six months, and use a stricter yardstick when judging someone's creditworthiness.

If they do not, the nine main non-bank issuers - there are also 16 banks which issue cards, but usually under more stringent terms - may be barred from borrowing or even forced to change management.

In extreme cases, they could be shut down.