Government: "Credit Card Cashback Benefits All Citizens... Aimed at Domestic Demand Recovery"

On the 18th, Lee Eok-won, the 1st Vice Minister of Strategy and Finance (second from the right), is briefing at the Central Emergency Economic Countermeasures Headquarters meeting at the Government Seoul Office.
[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Son Seon-hee] The government announced on the 18th that it will implement a 'credit card cashback' policy in the upcoming second half economic policy direction to be announced soon, aimed at boosting consumption in the second half of the year.

Lee Eok-won, First Vice Minister of the Ministry of Economy and Finance, said at the regular briefing of the Central Emergency Economic Countermeasures Headquarters held at the Government Seoul Office in the afternoon, "We are considering a method of providing cashback in the form of a refund at a certain rate for credit card usage that exceeds the usual increase compared to past comparison points." He added, "We also plan to set a cashback limit per individual so that benefits can be distributed evenly to all citizens."

Vice Minister Lee said, "This credit card cashback policy is designed to maximize the recovery of consumption, which had been contracted after COVID-19, during the second half of the year," adding, "It is intended to contribute to the recovery of the domestic demand sector, including small business owners who have faced difficulties, and to revitalize the economy through this."

He also explained, "From a macroeconomic perspective, household savings rates have increased significantly as consumption expenditures shrank greatly due to COVID-19," noting, "The household savings rate was 6.9% in 2019 but rose to 11.9% last year." He added, "This policy is also meaningful in preventing the high household savings rate from becoming fixed without being spent."

Specific details such as the cashback rate, individual limits, and eligible usage locations will be announced in the second half economic policy direction after further review and consultation soon.