"Have They Cut Enough?"... This Year's Discontinued Credit Cards Plummet '↓'

35 Types of Discontinued Cards and 63 New Cards This Year

[Asia Economy Reporter Ki Ha-young] The number of discontinued cards that disappeared from the market this year has significantly decreased compared to last year. This is interpreted as an effect of most of the products considered valuable cards from the consumer's perspective being phased out. On the other hand, newly launched cards maintained last year's level, with nearly twice as many new cards entering the market compared to discontinued cards.

According to the industry as of April 9 this year, 22 types of credit cards from seven specialized card companies (Shinhan, Samsung, KB Kookmin, Hyundai, Lotte, Woori, Hana) were discontinued. Compared to 157 types of credit cards discontinued last year, the number has sharply decreased. The trend of increasing discontinuations, with 73 types in 2017, 82 in 2018, and 160 in 2019, has been broken.

On the other hand, 55 types of new credit cards were issued, which is 2.5 times the number of discontinued credit cards. Including check cards, a total of 35 types of cards disappeared from the market this year, and 63 types of cards were newly launched.

The industry views the reduction in discontinued cards this year as mainly due to the phasing out of card products that deteriorate card companies' profitability. So-called 'Hyeja cards' (high-value cards) with high costs have disappeared in recent years. Last year alone, valuable cards such as the 'Emart KB Kookmin Card' and 'Payco X Lotte Card' were discontinued.

Meanwhile, new cards are being launched at a pace similar to last year. New credit cards launched were 135 types in 2017, 109 in 2018, 61 in 2019, and 144 in 2020. This year, cards equipped with benefits for digital subscription services, delivery applications (apps), and online shopping continue to enter the market following last year. Additionally, the increase in partnership cards, including Private Label Credit Cards (PLCC), is also notable.

An industry official explained, "By reducing overall product costs including marketing expenses, card companies have phased out most products that deteriorate profitability," adding, "Since last year, according to the 'Profitability Analysis System Guidelines,' card development must be designed so that profits exceed sales costs, so the number of new card launches is also decreasing compared to before."

Some expect that the number of discontinued cards may increase again from next year depending on the results of the merchant fee rate reassessment discussions this year. After the 2018 merchant fee rate reassessment, card companies with deteriorated profitability discontinued many cards in 2019 and 2020. Another industry official predicted, "If merchant fee rates decrease again, the trend of analyzing profitability and discontinuing unprofitable products will continue."