Receiving Only Cashback Benefits and Canceling Cards... New Trend of 'Cherry Pickers' Among MZ Generation

Possibility of Negative Impact on Credit Rating Also Exists

[Asia Economy Reporter Oh Gyumin] Job seeker Choi (25) recently created four credit cards in three months and canceled two of them. This was because he made the cards just to receive up to 140,000 won in ‘cashback’ benefits. Choi said, "Repeatedly applying for and canceling cards does not affect the credit rating."

Office worker Kim (29) also canceled a card issued at the end of January this week. Kim kept track of the payment amounts to receive cashback benefits and marked the benefit expiration dates on the calendar. Kim plans to continue participating in such events because applying for and canceling cards is easy. Although he hears people around him call him a ‘cheater,’ Kim said, "It’s just rational consumption."

As competition for credit card cashback (a system that returns cash when a certain amount is spent) events intensifies, so-called ‘cherry pickers’ who receive benefits and immediately cancel cards are emerging among the MZ generation.

As of the 15th, four major domestic card companies (Lotte, BC, Hana, Woori) are running cashback events offering from 70,000 won up to 140,000 won cashback based on payment amounts after card issuance. Card companies say, "There is no disadvantage even if the card is canceled immediately after receiving benefits, and the damage caused by cherry pickers is not significant."

Professor Kim Daejong of the Department of Business Administration at Sejong University said, "If you frequently cancel cards without repaying after use, it can negatively affect your credit, such as receiving disadvantages in loan interest rates."

Dr. Lee Sujin of the Seoul National University Consumer Trend Analysis Center said, "As more MZ generation members share benefits through various communities and gain advantages, card companies may suffer losses in the long term," adding, "Card companies need strategies to increase loyalty over the long term rather than providing short-term benefits."