South Korea Credit Cards
The South Korea is also sometimes called the Republic of South Korea. It has population of above 47 million people with 92 million credit cards plus 90 million debit cards in circulations.
The credit card is very popular in the country and there is large number of credit cards in South Korea. In 2000, the credit card was introduced and at that time there was a competition to get a credit card.
It was readily available irrespective of the job and income. There were no certain and effective policy for issuing the credit cards in South Korea and the country finally ended up with more than 3 million credit card defaulters.
Credit Card Fiasco
In spite of such as chaos in the South Korea credit card industry, the South Korea is considered among the most credit card friendly country in the world.
The government ends up with so many defaulters that it took several years to recover from such as a problem. Many effective policies, standards and procedures were designed to manage for issuing the credit cards in South Korea.
The South Korea credit cards were once so common that they were issued to students and even the jobless. Banks then focused on credit loan businesses rather than the credit card sales to reduce such severe conditions.
After such a bad experience of credit cards, the government designed some credit risk management strategies and they learned from their mistakes. People changed their spending habits and the credit default rate fell to 18% in 2004, 10.5% in 2005, 6% in 2006 and finally 3.79% in 2007, which is a very significant fall in the debt rate. The debt rate was noticed to further fall down at the end of the year during the financial crises.
Some experts believe that the US really needs to take some lessons from the South Korea credit cards industry and it can help them to get rid of the high debt rate in the country.
World’s Second Largest Market
The South Korea credit cards industry has become the second largest in the world. The two major global players are Visa and the MasterCard that uses the IT industry of the South Korea and its latest technologies to boost their business.
The credit cards are more popular in the South Korea than debit cards, says the official of the Bank of Korea. It is true that the credit cards have a high penetration while the debit cards are rarely used.
One of the few reasons of such an increase in the number of credit cards is the technology that South Korea posses. With high tech electronics and online banking system, which makes banking safer, people trust more and they spend more.