Easier Access to Preferential Loan Rates as Card Usage Criteria Significantly Relaxed

Exclusion Categories Reduced from 4–8 to Just 1
Installment Payments to Be Recognized Monthly According to the Plan
Changes to Be Implemented for New Loan Customers Starting September–October

Going forward, the criteria for recognizing card usage performance in order to receive preferential interest rates for bank loans will be significantly relaxed. Specifically, the number of card transaction types excluded from performance calculation will be reduced from 4–8 to just 1, and both credit card and debit card usage will be recognized equally without distinction. In addition, amounts from card installment payments will be reflected in the performance record according to the installment period.

The Financial Services Commission announced on the 22nd that it plans to implement these improvements to the criteria for recognizing card usage performance at banks in collaboration with the banking sector within the second half of this year.

Until now, banks have required customers to spend a certain amount with their cards to qualify for preferential interest rates, while simultaneously excluding 4–8 categories—such as cash advances, card loans, revolving payments, annual card fees, government subsidies, postpaid transportation card payments, and paid value-added service payments—from eligible transactions. As a result, since the excluded items varied by bank, there have been frequent complaints from customers who met the contracted amount but failed to receive preferential interest rates.

In response, the Financial Services Commission has decided to minimize the number of excluded transaction categories—previously 4–8 per bank—to just one, such as card loans or postpaid transportation card payments. Purchasing gift certificates, annual card fees, and government subsidies will, in principle, now be included in the eligible card usage.

Debit card spending will also be recognized as valid card usage, just like credit card spending. Until now, some banks either did not approve debit card usage as valid or offered lower preferential rates compared to credit cards, but from now on, equal recognition and benefits will be granted regardless of card type.

The way installment card payments are counted will also be improved. Currently, if a customer makes a 3.6 million won purchase in six monthly installments, the full 3.6 million won often counts toward performance in the month of purchase only. In the future, 600,000 won per month will be recognized as card usage for each month of the installment period.

The Financial Services Commission plans to implement these changes for new loan customers between September and October, after banks revise their (additional) loan agreements, develop related IT systems, and conduct employee training. The changes will also be gradually applied to existing loan customers as each bank completes their system upgrades.

Additionally, banks will be required to clearly explain the methods for calculating card usage performance and the conditions for preferential interest rates—including categories excluded from performance—on loan agreements, their websites, and mobile applications, in a way that is easy for customers to understand. For long-term loans with a maturity of five years or longer, banks will regularly notify customers of interest rate reduction conditions at least once a year via mobile messages or email.

An official from the Financial Services Commission stated, “This will enhance the transparency of the interest rate reduction system, help protect consumer rights, promote sound business practices, and help prevent possible disputes.”

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