Premium Cards Thriving Amid Revenge Spending... Annual Fees of Hundreds of Thousands Won Are Worth It

Luxury Brands and Hotels Offer Specialized Benefits
New Products Targeting the MZ Generation Flood the Market

[Asia Economy Reporter Ki Ha-young] Premium cards with annual fees reaching tens of thousands of won are gaining popularity. This is due to the surge in revenge spending on luxury goods, hotel stays, and more since the beginning of this year, as consumer sentiment, which had been subdued by the COVID-19 pandemic, has rebounded. In particular, the MZ generation (Millennials + Generation Z), who do not hesitate to spend on themselves, has emerged as a new consumer group, prompting card companies to launch products targeting them one after another.

According to the card industry on the 11th, there have been nine types of premium cards with annual fees over 100,000 won released this year as new products or renewed versions. Shinhan Card introduced two new cards: the 'Marriott Bonvoy The Best Shinhan Card' and the 'Shinhan Card Rave.' Hyundai Card also released a renewed version of its existing Purple Card called 'The Purple Auze' and launched a new premium card after three years called 'The Pink.'

The premium cards released this year are characterized by specialized benefits such as luxury goods, hotels, and golf. Additionally, the plate designs have been diversified considering the preferences of the MZ generation.

'The Pink,' launched by Hyundai Card at the end of last month, offers 5% M points accumulation on payments made at all department stores nationwide, major premium outlets, and online shopping malls. Thanks to its shopping-specialized benefits, market response has been enthusiastic. It is said to be issued at a pace similar to 'The Green,' which was issued 30,000 times within a year.

The Marriott Shinhan Card, released at the end of March, has been issued about 6,500 times so far. As Korea's first global hotel membership private label credit card (PLCC), this card has an annual fee of 267,000 won but is popular because it offers benefits exceeding the annual fee through elite stay performance that upgrades hotel membership tiers.

Samsung Card's global premium card, the 'American Express Gold,' is also gaining popularity. The number of issuances from April to May this year increased by 500% compared to the same period last year, with the limited edition Rose Gold version being especially popular. Lotte Card's 'Lotte Department Store Flex Card,' launched at the end of last year, has also gained popularity, with about 4,000 cards issued within five months of its release. It is explained that the card is favored by the MZ generation as it offers accumulation benefits even for luxury brands.

The popularity and launch of premium cards by card companies are analyzed to be due to pent-up consumption from the COVID-19 pandemic exploding into revenge spending on luxury goods and hotel stays. In fact, card approval amounts have been on the rise for three consecutive months since February this year. According to the Credit Finance Association, card approval amounts recorded a decline of 1.9% in January this year but then rose by 8.9% in February, 20.5% in March, and 18.3% in April, marking nearly 20% growth for two consecutive months.

An industry insider analyzed, "As consumption suppressed by COVID-19 bursts all at once, demand for premium cards offering luxury point accumulation and discounts on hotels and golf courses is surging," adding, "Especially, targeting the MZ generation who value personal consumption with tailored benefits has been effective."

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