Last year, discontinued credit cards were 2.6 times more than new cards

Last Year, 160 Types Discontinued
New Releases Limited to 61 Types

Fee Reduction Worsens Profitability
Profitable Cards Also Disappearing One After Another

[Asia Economy Reporter Ki Ha-young] It has been revealed that the number of credit cards discontinued last year nearly tripled the number of newly launched cards. This is the result of a desperate measure taken by card companies facing deteriorating profitability due to reduced merchant fees. As 'premium cards' that offered generous benefits have disappeared one after another, criticism is rising that this is leading to consumer harm.

According to the card industry on the 17th, the number of credit cards discontinued last year by eight major card companies (Shinhan, Samsung, KB Kookmin, Hyundai, Lotte, Woori, Hana, and BC Card) reached 160 types. In contrast, only 61 new cards were launched. The number of discontinued cards was about 2.6 times higher than new cards.

The number of discontinued credit cards has been increasing since 2017. In 2017, 73 types were discontinued, 82 in 2018, and 160 in 2019. Especially, the number of discontinued credit cards last year doubled compared to the previous year. As of March 11 this year, 23 types have been discontinued.

On the other hand, new credit cards are on the decline. There were 135 types in 2017, 109 in 2018, 61 in 2019, and 22 new products launched as of March 11 this year.

The sharp increase in discontinued credit cards last year is due to the reduction in merchant fees. As the card fee reassessment, conducted every three years, was applied from last year, card companies stopped issuing cards that were running at a loss. The difference between the fees at the time of card design and the current fees changed the profitability structure. A card company official said, "When designing a card, revenue and costs are analyzed to maintain an appropriate profit margin, but due to fee reductions, some products have reached a loss," adding, "In a situation where defending profits has become difficult, even products that are not at a loss but incur high costs have to be reduced voluntarily."

In particular, discussions on the profitability guidelines for card products were delayed last year, resulting in almost no new cards being launched in the first half, which maximized the gap between discontinued and newly launched cards.

This year, the trend of discontinuing unprofitable products is expected to continue. However, industry insiders predict that the gap between new and discontinued cards will narrow compared to last year. A representative from Card Company A said, "Products targeting new markets such as the subscription economy have been launched this year," and added, "New types of partnership products centered around fintech companies like Kakao are also expected to increase."

In fact, card companies have been releasing new products targeting new consumption patterns such as the subscription economy this year. Hyundai Card recently launched 'Digital Lover,' which offers up to a 10,000 KRW discount on major digital streaming service fees such as YouTube Premium, Netflix, and Melon. Shinhan Card introduced the 'Deep Ones Card,' emphasizing total subscription economy services, and KB Kookmin Card launched the 'KB Kookmin Easy Pick Titanium Card,' which provides benefits for home appliance rental services or automatic payment of utility bills.

A representative from Card Company B said, "The trend of discontinuing unprofitable products will continue this year," and added, "For new products, according to the 'Profitability Analysis System Guidelines' implemented from this year, cards must be designed so that revenue exceeds sales costs, so the likelihood of card products with reduced benefits being launched is high."

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