First Step Taken for 'Haetsallon Card'... 8 Card Companies Say "We Will Participate"

All 8 Major Card Companies Express Intent to Participate
Scheduled for Launch in the Second Half of This Year

[Asia Economy Reporter Ki Ha-young] The 'Haetsalron Card' for low-credit and low-income vulnerable groups has taken its first step toward launch. Although concerns about delinquencies were raised since the product targets low-credit individuals, all eight card companies have expressed their intention to participate, making the plan more concrete.

According to the card industry and the Korea Inclusive Finance Agency on the 18th, all eight specialized card companies (Shinhan, Samsung, KB Kookmin, Hyundai, Lotte, Woori, Hana, BC) plan to participate in the launch of the Haetsalron Card scheduled for the second half of the year. It is known that the card companies recently submitted opinions regarding the design and operation of the Haetsalron Card, including merchant restrictions. A representative from the Korea Inclusive Finance Agency said, "Currently, all eight card companies have verbally expressed their intention to participate," adding, "However, no concrete agreements such as business MOUs have been finalized yet."

The Haetsalron Card is a policy financial product planned by financial authorities to provide card usage benefits to low-credit individuals with a credit score of 680 or below (based on NICE, equivalent to past credit grade 7 or lower) who do not meet the credit card issuance criteria. It is part of the 'Policy Inclusive Finance Supply System Reform Plan' announced by the financial authorities as a follow-up measure to the maximum interest rate reduction to be implemented from July this year.

Under the premise that income verification is possible, individuals in the bottom 10% of credit scores who complete more than three hours of credit management education can apply for the Haetsalron Card, with a usage limit of up to 2 million KRW per month.

However, usage is restricted for cash advances, card loans, and seven major industries (general entertainment bars, dance entertainment bars, other bars, hygiene industries, leisure industries, gambling industries, and other industries). Haetsalron Card users will be offered benefits such as billing discounts based on usage amounts and interest-free installments.

As a new financial product for low-credit and low-income vulnerable groups, concerns about delinquencies were also raised within the card industry. While the intention to expand credit card issuance options for financially vulnerable individuals is understood, there were concerns that issuing credit cards to low-credit individuals might increase the risk of delinquencies rather than acquiring new customers. In response, Financial Services Commission Chairman Eun Sung-soo dispelled industry concerns at a meeting with representatives from card companies, capital companies, and savings banks in early last month, stating, "Since it will be operated with a 100% guarantee ratio, the burden on the card industry in case of delinquencies will be very low."

An industry official said, "Unless anything unexpected happens, all card companies are in an atmosphere of participating in the launch of the Haetsalron Card," adding, "They are approaching it from the perspective of ESG (Environmental, Social, and Governance) management, which has been gaining importance recently."

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