[EDITORIALS]Quality credit cards needed

Seoul is tightening the regulations on credit card companies, as problems with them are approaching a dangerous level. Recently announced measures focus on lowering the interest rate on cash advances, which cardholders have been complaining about, and containing the excessive zeal shown by card companies in signing up new users. Interest on card loans will drop to below 20 percent beginning in July, and there will be no more agents at your door or on street corners offering gifts to get your signature on an application. These are strong actions by the government, forbidding some activities and demanding others.

The card companies brought the restrictions on themselves. They are hard-pressed to explain 23-percent interest rates while market rates are at a historic low. They could not issue new cards at schools and on the street fast enough, and we have 1.1 million people with bad credit records to show for their energy. Credit card debts have pushed many persons to desperation, some to suicide and murder.

When consumer advocates and cardholders demonstrate on the streets, you realize that credit cards have become a new social evil.

But regulation alone will not solve the problem. Capping credit limits or forcing interest rates down will not solve the problem of obtaining credit; debtors can and have turned to unregulated moneylenders, who charge even more exorbitant rates.

The alternative should be to make access to commercial banking easier, by encouraging more unsecured loans to average borrowers. A new mainstream service must answer the demand for quick, short-term loans.

And the card companies must change. They must move away from seeing volume as the core of their business and focusing on getting more people to use their cards. The new emphasis must be quality; card limits and rates should be based on a consumer's creditworthiness.

The chairman of the Samsung Group, Lee Kun-hee, said recently that the credit card business must "follow orthodox business principles, keeping in mind the effect on the public's interest and concerns." Mr. Lee's wishes for this business should not be the goal of Samsung Card alone.