Maximum limit 2 million KRW
Shinhan, Samsung, KB Kookmin, Hyundai, Lotte, Woori launch on the 27th
[Asia Economy Reporters Sunmi Park and Hayoung Ki] Starting on the 27th, the policy financial product for low-income earners, the Haetsalron Card, will be launched, allowing even those with the lowest credit scores to obtain and use credit cards within their repayment capacity.
According to the Financial Services Commission on the 25th, the Haetsalron Card, designed to improve payment convenience and provide credit card benefits such as points for vulnerable low-income groups, will be available from the 27th. Six card companies?Lotte, Woori, Hyundai, KB Kookmin, Samsung, and Shinhan Card?will launch the card first, with Hana Card scheduled to release it by mid-November.
Targeting Individuals in the Bottom 10% of Personal Credit Scores, Maximum Limit of 2 Million KRW
The eligibility criteria include ▲completion of three mandatory Haetsalron Card education courses ▲annual disposable income of 6 million KRW or more ▲belonging to the bottom 10% of personal credit scores and not currently holding a personal credit card as of the guarantee application date, targeting vulnerable low-income groups. Based on the borrower's repayment willingness index and creditworthiness, the guarantee amount will be assigned differentially up to a maximum of 2 million KRW, and the card usage limit will be set lower than the guarantee limit considering unauthorized payments (such as transportation and communication fees).
However, usage of long- and short-term card loans (card loans, cash services), installment period restrictions (maximum 6 months), and certain categories such as entertainment and gambling industries are restricted. Since the card is issued with a guarantee, increasing the usage limit is also not possible.
After applying for a guarantee through the Korea Inclusive Finance Agency and undergoing screening, applicants can sign a guarantee agreement and choose one of the seven affiliated card companies to apply for card issuance. Except for restrictions aligned with the purpose of the policy financial product for low-income earners (such as limitations on long- and short-term card loans), usage is the same as a regular credit card.
As this financial product assumes a minimum repayment ability, guarantee or card issuance may be denied based on screening results. Those registered with delinquency information, financial disorder information, public information, or special record information at the Korea Credit Information Services, or those with special claims at the Korea Inclusive Finance Agency or the applying card company, cannot receive guarantees or card issuance.
Considering that this product targets the lowest credit score individuals, it operates with a 100% guarantee ratio. In case of delinquency, card companies can receive full subrogation payment from the Korea Inclusive Finance Agency, so the burden on the card industry due to delinquency is expected to be very low.
Credit Card Renewal and Card Company Changes Are Difficult
To apply for the Haetsalron Card, preparation of a joint certificate is required for online applications and consent to provide personal credit information. For online applications without consent to provide personal credit information, applicants must submit income verification documents as guided during the guarantee application via the app and proceed after confirmation by the Korea Inclusive Finance Agency. For in-person applications, contact the 1397 Inclusive Finance Integrated Call Center to receive guidance on necessary documents during the consultation appointment.
The Haetsalron Card is a policy financial product issued on the condition of a guarantee from the Korea Inclusive Finance Agency, so renewal or changing the card company like a regular credit card is difficult. However, there is no restriction on reapplication; after canceling the current Haetsalron Card and waiting 60 days, one can apply for another Haetsalron Card. If there is an outstanding installment balance, application is possible only after full repayment.
A financial authority official advised, "From the risk management perspective of the Korea Inclusive Finance Agency and card companies, if deemed necessary due to occurrences such as delinquency, the Haetsalron Card usage limit may be reduced or card usage suspended."
An industry insider said, "The Haetsalron Card was launched to enhance payment convenience and credit card benefits for vulnerable low-income groups," adding, "Since only one card can be issued per person, it is advantageous to compare annual fees and card benefits before applying."
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