[Ki Ha-young's Daily Card] 1 Trillion Won Scale Card Cashback... Who Gets It and How?

Get up to 300,000 KRW Refund When Spending More Than Q2 Card Usage
Calculation Starts from August Purchases, Payment Scheduled for September
Excludes Department Stores, Large Marts, and Online Shopping

Is there anyone these days without at least one credit card? In modern society, anyone can have a card if they want. Credit cards have brought unparalleled convenience to daily life. Now, wherever you go, you can easily see people paying with credit cards or smartphones. As demand has increased, cards with various benefits are being released almost daily. Accordingly, Asia Economy delivers diverse stories related to cards, which are inseparable from our consumer life, through the weekly 'Cards in Daily Life' corner, including introductions of new cards, behind-the-scenes industry stories, and guides for card beginners.

[Image source=Yonhap News]

This second half of the year, the government will introduce a credit card cashback policy called 'Win-Win Consumption Support Fund' to revive consumer sentiment that has been sluggish due to COVID-19. Starting from August, for three months, it will refund up to 300,000 KRW for card usage amounts exceeding those of the second quarter. Although many details such as payment methods still need to be finalized, we have summarized the information announced so far.

Who, how, and how much can receive it?

Anyone who holds a card can receive a 10% cashback on the amount of card usage that exceeds the average monthly card usage in the second quarter (April to June) by more than 3% during August to October. Both debit and credit card usage are included. For example, if the average monthly card spending in the second quarter was 1,000,000 KRW and 1,530,000 KRW was spent in August, the cashback will be 10% of the increase after excluding 3%, which is 500,000 KRW × 10% = 50,000 KRW.

The cashback amount will be calculated starting from August consumption, and payments are expected to begin in September. The maximum refund amount per individual is 300,000 KRW, with a monthly cap of 100,000 KRW. Assuming the average monthly card usage in the second quarter is 1,000,000 KRW, one must spend 2,030,000 KRW each month from August onward to receive the maximum monthly refund of 100,000 KRW. In other words, you need to spend an additional 1,000,000 KRW to get 100,000 KRW cashback.

Exclusions from cashback

There are places where even if you use your card more, you cannot receive cashback benefits. Department stores, large supermarkets, online shopping malls (including delivery apps), luxury brand stores, and entertainment establishments are typical examples. This is because the policy aims to boost consumption for small business owners, self-employed people, and local markets that were hit hard by COVID-19. More specifically, large electronics retailers, golf courses, karaoke rooms, arcades, lottery shops, adult product stores, precious metal businesses, the four major insurance premiums, and automatic payments for transportation and communication fees are also excluded from cashback consumption calculations. For the same reason, university tuition paid by card is eligible for cashback, but car purchases are not.

However, purchases of home appliances and furniture are expected to be included in the calculation depending on the place of purchase. If bought at department stores or large supermarkets, the amount will be excluded, but if purchased at small-scale stores, it will be included.

How to check second quarter card usage and monthly consumption amounts

The government plans to build a 'Win-Win Consumption Support Fund Payment System' in cooperation with card companies and the Credit Finance Association. Individuals only need to designate their main card. By designating the most frequently used main card, the card company holding the usage data will calculate the baseline amount and notify the user. For example, if you currently have Shinhan, Hyundai, and Woori cards and designate Shinhan Card as your main card, from August when the system is implemented, you can check the average monthly usage in the second quarter and the cumulative monthly usage after August for all credit and debit cards you hold with Shinhan Card.

There are no restrictions on the usage period or places for the refunded cashback, but the government plans to have the refunded cashback deducted first when using the card in the future. Also, if the 1.1 trillion KRW budget allocated for card cashback within three months is not exhausted, the cashback provision period may be extended.

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