1~2 Grade Card Loan Interest Rate Drop...Will High Credit Card Loans Concentrate? (Comprehensive)

Last Month, Interest Rates for Grade 1-2 Card Loans at 5 Card Companies Decreased by 0.01-0.45%p
Overall Card Loan Interest Rates Increased by 0.23%p

[Asia Economy Reporter Ki Ha-young] Last month, the card loan interest rates offered to high-credit borrowers with grades 1 to 2 decreased. This is interpreted as a result of credit card companies competitively lowering interest rates to attract high-credit borrowers turning to card loans due to the government's regulations raising the threshold for bank loans.

According to the disclosure by the Credit Finance Association on the 23rd, among the seven specialized credit card companies last month (Shinhan, Samsung, KB Kookmin, Hyundai, Lotte, Woori, Hana Card), the average interest rate (operating price) of card loans based on the standard grade for high-credit borrowers with grades 1 to 2 decreased in five companies. Lotte Card saw the largest drop, falling 0.45 percentage points from the previous month to 10.68%. Following that, Samsung Card dropped 0.21 percentage points to 8.02%, and KB Kookmin Card fell 0.16 percentage points to 10.24%. Hyundai Card and Hana Card also decreased by 0.11 percentage points and 0.01 percentage points from the previous month, recording 8.89% and 10.47%, respectively.

On the other hand, Woori Card showed a contrast, rising 1.89 percentage points from the previous month to 7.83%. Since August last year, Woori Card has been operating the 'Wooka Minus Loan' with an annual minimum interest rate of 4% for creditworthy members. Although its interest rate increased compared to the previous month, it still offered the lowest interest rate among the seven specialized credit card companies for high-credit borrowers with grades 1 to 2. As of January, 41.13% of Woori Card's card loan users received interest rates below 10%. Shinhan Card recorded 11.65%, up 0.03 percentage points from the previous month.

3% Card Loans Also Appear... Increasing Demand from High-Credit Borrowers

The overall card loan interest rates, including those for high-credit borrowers, slightly increased compared to the previous month. As of the end of February, the average card loan interest rates based on the standard grade of the seven specialized credit card companies ranged from 11.07% to 14.46%. The average of the seven companies was 12.92%, up 0.23 percentage points from 12.69% in the previous month. This marks a reversal from the 0.63 percentage point decline in January. While card loan interest rates for high-credit borrowers decreased, the overall rates applied mainly to mid- to low-credit borrowers who primarily use card loans increased.

This is interpreted as a result of financial authorities' loan regulations prompting high-credit borrowers seeking funds for real estate acquisition and stock investments to show interest in card loans, leading credit card companies to simultaneously launch products targeting this demand. KB Kookmin Card applied a minimum interest rate of 3.9% on card loans starting this month. Lotte Card also introduced the 'Roca Money-Prime,' a card loan product for high-credit members, on the 11th. With card loan interest rates dropping to the 3% range, the interest rate gap with commercial bank credit loans has narrowed to as little as 1 to 2 percentage points.

An industry insider said, "As high-credit borrowers enter card loans mainly used by mid- to low-credit borrowers, the interest rates for grades 1 to 2 card loans are decreasing," adding, "With products for these demands being launched one after another, competition to attract customers is expected to intensify."

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