8 Major Credit Card Companies Sequentially Introduce
Maximum Limit of 2 Million KRW for Bottom 10% Credit Scores
[Asia Economy Reporter Ki Ha-young] The 'Haetsalron Card,' which can be issued even to low-credit individuals in the bottom 10% credit score bracket, will be launched next week. As the number of places where low-credit and low-income vulnerable groups can borrow money from regulated financial companies decreases, demand for this card is expected to surge.
According to the Korea Inclusive Finance Agency and the credit card industry on the 19th, the policy-based inclusive finance product Haetsalron Card is scheduled to be launched around mid-next week. All eight major credit card companies (Shinhan, Samsung, KB Kookmin, Hyundai, Lotte, Woori, Hana, BC) will introduce the product, with each company planning a sequential launch. Shinhan, Samsung, KB Kookmin, Hyundai, Lotte, and Woori cards are expected to launch by the end of October, Hana card in November, and BC card, which has been actively introducing its own card since this year, plans to launch next year. Benefits such as billing discounts based on usage amount and interest-free installments will also be provided. Since benefits including annual fees are expected to vary by card company, it will be advantageous to carefully consider these before applying.
The Haetsalron Card is a policy-based inclusive finance product provided by financial authorities to the lowest credit individuals who find it difficult to obtain credit cards, on the condition of completing credit management education and providing income documentation. It is part of the 'Policy Inclusive Finance Supply System Reform Plan' announced by financial authorities as a follow-up measure to the maximum interest rate reduction implemented in July this year.
Maximum limit of 2 million KRW... Only one card allowed per person
Provided that income verification (disposable income of at least 6 million KRW annually) is possible, individuals in the bottom 10% credit score bracket who complete at least 3 hours of credit management education can apply for the Haetsalron Card, with a usage limit of up to 2 million KRW per month. Only one card is allowed per person, and usage is restricted for cash advances, card loans, and entertainment/gambling industries such as karaoke bars, casinos, and real estate agencies. Additionally, those who already have and use a credit card are excluded from eligibility. The guarantee limit for Haetsalron Card payments will be differentiated by reflecting repayment willingness indices considering internal credit evaluation, repayment history, financial education, and credit/debt management consulting.
The total supply scale of Haetsalron Card is 50 billion KRW. Although there is no allocation of supply volume by card company, since products will be launched sequentially by company, customers may flock to the companies that introduce the product first. The credit card industry stated that, as this is a new financial product for the lowest credit individuals, they will closely monitor areas such as delinquencies. This is because unexpected variables may arise even though the product is 100% government-guaranteed.
An industry official said, "Issuing credit cards to low-credit individuals carries a higher risk of delinquency than acquiring new customers," and added, "Since the launch dates differ by card company, demand may concentrate on the companies that launch the product first."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
