How to Save on Summer Vacation in an Era of High Inflation... Smart Cards and Insurance in Focus [Practical Financial Techniques]

As the vacation season officially begins, more consumers are looking for ways to save on vacation expenses. The high inflation situation, which has hit not only Korea but the entire world, shows little sign of easing. Amid this, financial consumers are paying attention to overseas travel-specialized products and vacation season events offered by banks, card companies, and insurance firms.

◆ Accounts and cards with 'zero currency exchange fees' for overseas travel = According to the financial sector on the 19th, four major domestic banks (KB Kookmin, Shinhan, Hana, Woori) along with Toss Bank and Travel Wallet have been competing to attract customers by launching accounts and card products that waive currency exchange fees. Kakao Bank is also expected to join this month, and NH Nonghyup Bank is planning similar products.

These products generally do not charge fees for overseas ATM withdrawals and currency exchange, and some do not impose fees on re-exchange either. The secret to these zero currency exchange fees lies in the base exchange rate (the reference rate used when buying or selling foreign currency). When converting Korean won to foreign currency, a higher rate than the base rate is usually applied, and a lower rate when converting back. However, with specialized cards, the base exchange rate itself is applied for currency exchange.

In the case of Toss Bank, no fees are charged when converting foreign currency back to Korean won. Hana’s Travelog reduces the 1% fee on re-exchange by allowing customers to send remaining foreign currency to other Travelog customers free of charge.

Shinhan SOL Travel and Woori WeBe Travel offer interest on the remaining balance after currency exchange. SOL Travel pays interest on US dollars (2% per annum) and euros (1.5% per annum) held in a dedicated foreign currency account after exchange. WeBe Travel offers 2% and 1.5% interest on deposits in dollars and euros, respectively.

Additional benefits such as airport lounge access, discounts, and cashback are bonuses. Shinhan SOL Travel and Woori WeBe Travel check cards allow free use of airport lounges (The Lounge) once each in the first and second half of the year. However, WeBe Travel’s benefit is only valid until the end of this year, and SOL Travel requires a minimum monthly spending of 300,000 won. KB Kookmin Travelers also offers a 30% discount for one person or a free companion for one person when using airport lounges until the end of the year.

◆ Pay attention to credit cards and PLCCs with great benefits = Using specialized products offered by card companies can also be advantageous. Hyundai Card’s 'NOL (놀) Card,' a private label credit card (PLCC) launched last year in partnership with Yanolja, is a travel and leisure-specialized product. It offers 10% NOL points (up to 36,000 points per month) on payments made at Yanolja, Interpark, Triple, as well as overseas online and offline payments, shopping, leisure, and online content (OTT) consumption.

Frequent travelers might also consider airline mileage cards. Samsung Card’s Mileage Platinum SkyPass, BC Card’s Baro Air Plus SkyPass Card, Woori Card’s Card Uijeongseok Every Mile SkyPass, and Hana SkyPass Amex Platinum Card all accumulate 1 Korean Air SkyPass mileage per 1,000 won spent at all or domestic merchants. Some overseas merchants offer double mileage accumulation.

Card companies are also attracting customers with various events. Shinhan Card is running a cashback promotion until the end of October for customers holding its Point Plan credit/check cards or SOL Travel check cards, offering 20% cashback up to 20,000 won per month when paying at 30 popular restaurants in Jeju Island (18 in Jeju City and 12 in Seogwipo).

BC Card offers an immediate 10,000 won discount when purchasing Jin Air tickets on the Jin Air website or app using a BC Card until August 11. The discount applies to tickets costing over 200,000 won for flights taken by September 30. Additionally, until the end of this month, customers paying with BC Card at Shilla Duty Free stores (Seoul, Jeju, Incheon Airport) can receive prepaid cards worth up to 150,000 won depending on the purchase amount.

◆ 'Cashback' insurance products for safe return = Travel insurance products have recently increased their benefits significantly. Kakao Pay Insurance’s overseas travel insurance offers up to a 10% discount depending on the number of insured persons and refunds 10% of the paid premium as a 'Safe Return Refund' if the traveler returns without incident. This product attracted over one million customers within a year of its launch. Carrot Insurance also offers 10-20% premium discounts based on the number of insured persons and provides 'Safe Travel Celebration Points' upon safe return.

Major insurers are actively participating as well. KB Insurance offers 10% of the premium back as KB Pointree under the name of 'Return Celebration Money' regardless of accident occurrence when purchasing KB Overseas Travel Insurance via the KB Star Banking app. The maximum limit is 30,000 points. Samsung Fire & Marine Insurance provides premium discounts of 10% for two people, 15% for three, and 20% for four or more when customers purchase direct overseas travel insurance together.