[Ki Ha-young's Life Card] "The condition for my first credit card?" The answer is 'No conditions'

[Asia Economy Reporter Ki Ha-young]Is there anyone these days without at least one or two credit cards? In modern society, anyone can have a card if they want. Credit cards have brought unparalleled convenience to daily life. Now, you can easily see people paying with credit cards or smartphones wherever you go. As demand has increased, cards with various benefits are being released almost daily. In response, Asia Economy delivers diverse stories related to cards, which are inseparable from our consumer life, through the weekly 'Cards in Daily Life' corner, including introductions of new cards, behind-the-scenes industry stories, and guides for card beginners.

The credit card usage rate is 71.6%, with an average of 3.8 cards per person. This is based on data compiled by the Korea Federation of Credit Finance Companies as of 2018. The fact that credit card usage accounts for 70% of total private consumption expenditure means that credit card use has become normalized in daily life.

However, when young adults try to get their first credit card, it can be overwhelming. There are 8 dedicated card companies and 11 banks that also operate card businesses, with over 300 cards currently available. Additionally, with merchant fee reductions worsening card companies' profits and financial authorities recommending restraint in card marketing, popular cards once known as 'value cards' have been discontinued. Representative examples include Hana Card (formerly Woori Exchange) Cross Mileage Card and SC First Bank Plus Mileage Card, which are airline mileage accumulation cards.

So, what criteria should be used to choose a credit card? Industry insiders recommend cards that match one’s consumption patterns, but if you don’t know your pattern, they unanimously suggest choosing cards with low annual fees and no conditions. These are so-called 'unconditional cards,' which offer unlimited discounts and points accumulation at all merchants regardless of the previous month’s spending.

For example, the 'Shinhan Card Deep Dream' accumulates 0.7% of the spending amount without limits on previous month’s spending or accumulation caps. Similarly, the 'Hyundai Card Zero (Discount Type)' offers a 0.7% discount at all merchants without restrictions on previous month’s spending or discount limits. Woori Card’s 'DA@ Card’s Essence' and Lotte Card’s 'Like It All' also provide basic discounts of 0.8% and 1%, respectively, at all merchants. Unconditional cards are good choices when card benefits are modest, around 10,000 to 20,000 KRW per month, allowing for easy selection without much worry.

Also, when you don’t know your consumption pattern, choosing discounts on communication or transportation expenses can be another method. Since you pay fixed monthly fees like your mobile phone bill anyway, even a 5,000 KRW monthly benefit is worthwhile. Furthermore, if there are both discount-type and points accumulation-type cards, the points accumulation cards are generally designed to offer slightly more benefits than discount cards.

Generally, credit cards offer more benefits than check cards. However, when issuing a credit card to enjoy benefits, you should consider whether it might increase unnecessary spending. Everyone knows it’s easy to increase spending but hard to reduce it again.

This content was produced with the assistance of AI translation services.