At the end of June, average card loan interest rates based on standard grades for 7 major credit card companies ranged from 12.45% to 13.52%
[Asia Economy Reporter Ki Ha-young] Last month, the interest rates on long-term card loans (card loans) slightly decreased compared to the previous month. This is attributed to the pre-reflection of the legal maximum interest rate reduction implemented from the 7th of this month and the relatively lower card loan interest rates for high-credit borrowers.
According to the disclosure by the Credit Finance Association on the 21st, as of the end of June, the average interest rates (operating price) for card loans based on standard grades at seven full-service card companies (Shinhan, Samsung, KB Kookmin, Hyundai, Lotte, Woori, Hana Card) ranged from 12.45% to 13.52%. The average rate across the seven companies was 12.95%, down 0.33 percentage points from 13.28% the previous month.
Among the seven card companies, five saw a decrease in their average card loan interest rates. In particular, Samsung Card preemptively applied the legal maximum interest rate reduction from last month, lowering the average rate among full-service card companies. Samsung Card recorded an average interest rate of 12.67% last month, down 1.36 percentage points from 14.03% the previous month. The interest rate offered to grades 9-10 dropped sharply to 19.51% from 23.2% the previous month, a decrease of 3.69%.
Earlier, Samsung Card had already lowered the maximum interest rates from 23.9% to 19.9% last month for short-term card loans (cash services), card loans, certain revolving payment agreements, Samsung Card credit loans, and installments, following the legal maximum interest rate reduction from 24% to 20% effective from the 7th of this month.
The average interest rates offered to high-credit borrowers in grades 1-2 also decreased. The interest rates for grades 1-2 across the seven companies ranged from 8.61% to 10.99%, slightly lower than the previous month.
Looking at individual card companies, Woori Card had the lowest average interest rate at 12.45%, down 0.49 percentage points from the previous month. Following were Samsung Card at 12.67%, and Hyundai Card at 12.77%, which rose by 0.09 percentage points. Shinhan Card recorded 13.00%, down 0.39 percentage points, while Hana Card recorded 13.02%, up 0.27 percentage points. KB Kookmin Card and Lotte Card recorded 13.22% and 13.52%, down 0.28 and 0.15 percentage points respectively.
With the maximum interest rate reduction effective this month, loan product interest rates such as card loans are expected to decrease in the future. However, card companies are also likely to tighten loan screening more than before to reduce defaults, making it more difficult for existing low-credit customers to use financial products like card loans.
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