Last Year 160 Discontinued Cards... Nearly Triple the Number of New Cards (Comprehensive)

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] #. Office worker Kim Ji-eun (35, female) is recently looking for a new credit card as airline mileage credit cards with high accumulation rates have been discontinued one after another. After the discontinuation of Hana (formerly Woori Exchange) Crossmile Card, the SC First Bank Plusmile Card she used was also discontinued at the end of last year. She is trying to find a replacement card for the discontinued ones in her spare time, but the problem is that most benefits have been reduced, so there are no attractive cards.

It was found that the number of credit cards discontinued last year nearly tripled compared to 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 provided generous benefits disappear one after another, criticism is rising that this is leading to consumer harm.

According to the card industry on the 17th, last year, 160 types of credit cards were discontinued by eight major card companies (Shinhan, Samsung, KB Kookmin, Hyundai, Lotte, Woori, Hana, BC Card). On the other hand, 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, in 2018, 82 types, and in 2019, 160 types were discontinued. 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 of 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 profitability structure changed due to differences from the fees at the time of card design. 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 is difficult, even products that are not at a loss but have 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 of the year, 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 on fintech companies like Kakao will also 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 10,000 KRW discount on major digital streaming services like 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. Samsung, Woori, and Hana Cards also introduced new products specialized for the subscription economy this year.

A representative from Card Company B said, "The trend of discontinuing unprofitable products will continue this year," adding, "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 there is a high probability that cards with reduced benefits will be launched."

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