[Gi Ha-yeong's Lifestyle Card] Credit Scores Vary Greatly... Card Loans Favorable to My Score

Over 900 Points: Woori Card Card Loan Advantage
501-600 Points: Hana Card
Below 300 Points: Lotte Card Card Loan Available

Is there anyone these days without at least one credit card? In modern society, anyone can have a card if they set their mind to it. Credit cards have brought unparalleled convenience to daily life. Now, wherever you go, you can easily see people paying with credit cards or smartphones. As demand has increased, cards with various benefits are being released almost daily. Accordingly, Asia Economy delivers diverse stories related to cards, which are inseparable from our consumer life, through the weekly 'Cards in Daily Life' corner, including introductions to new cards, behind-the-scenes industry stories, and guides for card beginners.

Starting this year, the credit evaluation system, which serves as the standard for card services, has changed from a grade system to a score system. Previously divided into 1 to 10 grades, it has been detailed into 1 to 1000 points. This measure aims to provide better financial services to consumers whose credit scores showed little difference, such as those in the upper ranks of grade 7 and the lower ranks of grade 6.

Accordingly, from January this year, the credit card issuance criteria changed from the previous grade 6 or higher to a NICE Information Service credit score of 680 or higher, or a Korea Credit Bureau (KCB) score of 576 or higher. The Korea Federation of Banks recently disclosed last month's card loan (long-term card loan) interest rates based on credit scores from credit rating agencies.

As of the end of January, financial consumers with credit scores exceeding 900 found it most advantageous to use card loans from Woori Card. Woori Card offered the lowest interest rate of 6.06% among the seven major card companies (Shinhan, Samsung, KB Kookmin, Hyundai, Lotte, Woori, Hana). This rate is 5.49 percentage points lower than Lotte Card’s 11.55% rate offered to customers with credit scores over 900.

Last year, Woori Card launched the 'Woori Card Minus Loan' product, which allows customers with excellent credit to freely use within an agreed limit. Since the interest rate is set between a minimum of 4% and a maximum of 10% annually depending on customer creditworthiness, the low interest rates for high-credit customers are also considered to be influenced by this product. Following Woori Card, Shinhan Card (8.73%) and Hyundai Card (10.50%) offered relatively favorable rates to high-credit customers with scores over 900.

For financial consumers with scores between 501 and 600, corresponding to the previous grade 6 credit card issuance standard, Hana Card provided the lowest interest rate at 14.71%. This was followed by Lotte Card (16.13%) and KB Kookmin Card (17.38%).

Financial consumers with scores lower than the credit card issuance standard were also able to use card loans. Five card companies?Shinhan, Samsung, KB Kookmin, Hyundai, and Lotte Card?offered card loans to consumers with scores between 401 and 500. Among them, Samsung Card provided the lowest interest rate at 13.54%, while Hyundai Card recorded the highest at 23.50%. Additionally, Lotte Card offered card loans to consumers with scores below 300 at an interest rate of 14.76%.

Each card company refers to credit scores from credit rating agencies but sets customer-specific credit scores and card loan interest rates according to their own standards. If you need urgent funds for living expenses and must use a card loan, why not first check the card loan interest rates disclosed monthly by the Korea Federation of Banks? By comparing card loan interest rates and inquiring with each card company, you can apply the most advantageous rate for yourself.