Installment Payments to Count Toward Card Performance, Making Loan Rate Cuts Easier

[Anchor]

It is time for our Friendly Economy segment with reporter Han Jiyeon. Han, I understand the conditions for fulfilling credit card performance requirements are changing?

[Reporter]

When it comes to loan interest rates, most items that were previously excluded from preferential rate performance requirements will now be recognized.

Using check cards will also be recognized in the exact same way as credit cards.

When people get loans from banks, their interest rates are discounted if they meet certain criteria, such as transferring their salary or fulfilling credit card spending requirements.

Among these preferential rate conditions, the card performance requirement has been a particular subject of complaint.

Many people pointed out that even though they used their cards frequently, they often failed to receive these preferential rates.

This was because individual banks had a large number of items excluded from their card performance calculations.

Using cash advances or card loans, revolving payments, annual card fees, deferred public transit payments, and even government subsidy payments were excluded by many banks, with close to four to eight such items being omitted from performance totals.

So, even if someone spent 1 million won on their card, if annual fees or deferred transit fares were included, that portion was not counted toward their performance.

Now, these excluded items will be reduced to a maximum of one.

Shinhan, Woori, and Hana banks will recognize all card spending.

Ten other banks, including Kookmin, NH Nonghyup, and IBK, will exclude only card loans, while Suhyup Bank will exclude only deferred transit payments, recognizing everything else.

Check cards are changing as well.

While some banks previously did not count check card spending toward performance at all or valued it lower than credit cards, check cards will now be fully recognized on equal terms with credit cards.

[Anchor]

It looks like regulations related to installment payments are changing too.

[Reporter]

Currently, when making installment purchases, the entire amount is recognized as performance only in the first month.

However, the remaining months are not recognized.

They fail to be credited.

This aspect is now changing.

Let us look at an example.

If the condition is spending at least 600,000 won every month to get a rate discount, buying a 3.6 million won item with a 6-month installment meant that the full 3.6 million won was counted only in the first month of purchase, while the remaining five months saw zero performance met.

Naturally, this made it difficult to fulfill the 600,000 won monthly condition.

This is going to change.

The amount will be divided by the number of installment months, counting it as having fulfilled 600,000 won of performance each month for six months.

Aside from this, there were many complaints due to insufficient guidance.

There were cases where consumers failed to meet performance targets simply because they paid their credit card bills ahead of the payment due date, where amounts spent using family cards were not aggregated, or where proper guidance was lacking on how performance is calculated when changing card payment dates.

Going forward, banks plan to provide detailed guidance on these specific criteria in loan agreements, on their websites, and through apps so that consumers can easily understand them.

For long-term borrowers with loan periods exceeding five years, relevant conditions are scheduled to be notified via text message or email at least once a year.

The new standards will be applied sequentially to new borrowers between September and October, while Hana Bank has already been implementing them since the end of last month.

For existing borrowers, the changes will take effect after October following internal system updates by each bank.

[Anchor]

Lastly, there are forecasts that jobs will decrease because of AI.

[Reporter]

The Korea Development Institute (KDI) has released a forecast that, in 10 years, the impact of AI will lead to an average annual reduction of 256,000 jobs.

To put the figure of 256,000 jobs into perspective, it accounts for about 2.1 percent of total employed workers based on 2024 data.

The blow is expected to be concentrated particularly on occupations requiring a certain level of skill, such as professional, clerical, and sales positions.

Currently, about 1.4 percent of the entire economy in terms of jobs can be replaced by AI, but this proportion is projected to surge to 8.1 percent a decade from now.

Interestingly, however, a simultaneous forecast suggested that as the wage growth rate for high-income occupations slows down, wage disparities between job types will either narrow compared to now or maintain a similar level.

Even if jobs decrease, productivity itself is expected to rise.

Total factor productivity refers to productivity that increases on its own due to improvements in technology or efficiency, without requiring additional inputs of labor or facilities.

Over the next decade, as generative AI spreads, the KDI estimates that South Korea's overall total factor productivity will increase from 1.5 percent to 3.5 percent.

In fact, companies that have introduced AI showed an increase in sales per employee of about 20 percent.

The KDI urged that the government must prepare measures hand in hand, including supporting the adoption of AI by small and medium-sized enterprises, job retraining, and eliminating blind spots in unemployment benefits.
※ Please note: This article was translated by AI and may contain errors.