Low-credit borrowers undergoing debt adjustment who faithfully repay their debts will be able to use a postpaid transit card with a monthly limit of 100,000 won. Individual business owners with low credit scores can also use a credit card for up to 5 million won if they meet certain conditions.
The Financial Services Commission held a meeting on Jan. 9 presided over by Vice Chairman Kwon Dae-young of the Financial Services Commission (FSC) and finalized the launch schedule for two restart-support card products.
The restart-support postpaid transit card can be used via a debit card regardless of credit score as long as there are no arrears. The initial monthly limit is 100,000 won, and if card bills continue to be repaid on time without arrears, it increases to 300,000 won. Previously, when debt adjustment was in progress, it was difficult to use credit provided by private financial firms until related public records were deleted.
Applications can be made to card companies starting Mar. 23, and about 330,000 people are expected to benefit as of the end of last year. After card companies' credit assessments, general payments beyond public transit will also be allowed. If arrears occur or information such as delinquency is registered with the Korea Credit Information Services, use will be suspended.
The Sunshine Loan card for individual business owners will also be launched on Feb. 20. This product is available with a guarantee from the Korea INclusive Finance Agency (KINFA) for individual business owners in the bottom 50% of credit who currently have no arrears and have annual disposable income of at least 6 million won. Even if undergoing debt adjustment, issuance is possible with a record of faithful repayment for at least six months.
The usage limit is 3 million to 5 million won per month, and the installment period is up to six months. Functions such as card loans (cash advances and card loans), revolving, and payment deferment cannot be used. An estimated 25,000 to 34,000 people are expected to receive support through this card.
Vice Chairman Kwon Dae-young said, "Helping those facing difficulties such as arrears and business closure return to economic activity will be an opportunity for financial companies to secure new customers in the long term," adding, "Please pay special attention in operations so that cases are not excluded due to low credit scores."