"Become Rich" Those Days... The Real Card Crisis Featured in 'Jaebeoljip'

Drama 'Jaebeoljip Maknae Adeul' as Subject
Excessive Loan Relaxation at the Time Led to Increase in Credit Delinquents
Opportunity for Maturation of Bad Bank and Personal Bankruptcy Systems

JTBC drama The Youngest Son of a Conglomerate protagonist Jin Do-jun (played by Song Joong-ki) / Photo by JTBC

The JTBC drama "The Youngest Son of a Conglomerate," which skillfully blends real-life events in Korea with fictional stories to captivate viewers, once again drew attention on the 18th with an episode addressing the so-called "credit card crisis." In the drama, the card crisis served as a stepping stone for the protagonist Jin Do-jun (played by Song Joong-ki) to secure business funds, but in reality, it was a major financial crisis that left deep wounds in Korean society.

The 'Card Boom' Created by Reckless Credit Loans

In episode 14 of "The Youngest Son of a Conglomerate," Jin Do-jun sells the credit card company "Sunyang Card" to his uncle Jin Dong-gi (played by Jo Han-chul). However, the reason Jin Do-jun willingly handed over this highly profitable company was due to a hidden background anticipating the impending card crisis that would soon engulf Korean society. Shortly after, as delinquencies at Sunyang Card soared due to the crisis, Jin Dong-gi found himself forced to borrow 400 billion won, allowing Jin Do-jun to draft the share sale contract from an even more advantageous position.

The card crisis depicted as the backdrop in the drama was, in reality, a financial crisis that shook Korean society in 2002. Since credit cards are widely used even by ordinary households, the crisis inflicted the greatest damage on the lower-income class.

At that time, Korea was still recovering from the aftermath of the 1997 foreign exchange crisis. The government adopted an economic recovery strategy in 2001 focused on boosting domestic demand through consumption stimulation, relaxing numerous regulations related to credit cards. This included lifting the maximum limit on cash advances and providing income tax deductions for credit card usage.

BC Card's 2002 'Become Wealthy' CF / Photo by YouTube video capture

Following this, a credit card boom unfolded domestically. By the end of 2002, the number of issued credit cards surpassed 100 million for the first time ever, meaning every citizen had at least two credit cards on average. Card companies also engaged in fierce advertising competition amid unprecedented prosperity. BC Card’s commercial "Become Rich" even became a popular catchphrase.

Delinquency Soars, Producing Many Defaulters... Tragedies Including Family Suicides

However, it did not take long for the card boom to turn into a crisis. The credit card delinquency rate, which was 2.6% at the end of 2001, skyrocketed to 14% in just two years. As delinquencies surged, the government tightened regulations on card loans to curb the rise in household debt, but ironically, this led to a sharp increase in the number of defaulters. The number of defaulters, which was 2 million at the end of 2000, exceeded 3.8 million by April 2004, with over 60% of them owing debts related to credit cards.

As delinquencies soared, card companies that had aggressively expanded their businesses began to falter. In 2003, the government announced a "Comprehensive Credit Card Company Plan" at a financial policy meeting, aiming to normalize the market through efforts by the card companies themselves and external funding from creditors. Many card companies were absorbed by banks, and LG Card, which revealed bad debts too large for the private market to absorb, received public funds from the Korea Development Bank.

Credit Recovery Committee responsible for debt restructuring of defaulters / Photo by Yonhap News

Although the crisis for financial firms was resolved, the millions of defaulters already accumulated had to endure prolonged hardship. In April 2003, a tragic incident occurred where a father in his 60s took his own life after his daughter became despondent over debts amounting to hundreds of millions of won. In July of the same year, a horrific event took place in an apartment in Bupyeong-gu, Incheon, where a man threw his daughter and son out of a window before jumping himself. The domestic bad bank (a restructuring institution focused on credit recovery) and personal bankruptcy system also matured during this period.

The Deepening Shadow of Polarization in Korea After the Card Crisis

The card crisis continues to cast a long shadow over Korean society today. Shortly after the crisis subsided, the 2008 U.S. subprime mortgage crisis triggered a global financial crisis, and recently, the economic crisis caused by COVID-19 combined with soaring inflation following the Ukraine-Russia war has further intensified the suffering of the lower-income class.

According to the "Household Financial Welfare Survey" by Statistics Korea on the 7th, as of the end of the first quarter this year, the average asset value gap between the top 20% and bottom 20% of domestic assets reached 64.0 times, marking the highest level since related statistics began.

In "The Youngest Son of a Conglomerate," after resolving the card crisis incident, the protagonist Jin Do-jun recalls his impoverished past life. He remembers how his father (played by Lee Gyu-hoe) had to resort to high-interest private loans to cover his younger sibling’s hospital bills. Jin Do-jun reflects on his father working two jobs, including driving a substitute driver, to repay the loans, and monologues, "I inherited wealth, you inherited poverty. Even under the same sky at the same time, we live in different worlds."

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