South Korea will be introducing tougher regulations on credit cards later this month as part of an effort to cut down on consumer debt. South Korea’s Financial Services Commission has stated that it will limit growth in credit card issuers’ total assets and it will be making it tougher for consumers to get a credit card. The agency said that the measures aim to "prevent sharp credit growth related to credit cards from developing into a major factor aggravating household debt problems.” It said that card issuers would be required to devise guidelines on growth in three categories; total assets, number of cards issued, and total marketing costs. The agency also said it would scrap an existing policy of allowing credit card issuers and other credit companies to raise up to 10 times their net equity via bond issuances.
These changes in policy come as continued growth in house hold debt emerged as a major risk to Asia’s fourth largest economy. Korea is already experiencing some of heaviest debt rates amongst major developing economies. The commission said that it also plans to unveil measures aimed at improving the quality of and limiting growth in household debt later this month.
As always, stay tuned to Credit Cards Professor for more credit card news and updates.
| < Prev | Next > |
|---|
