Big spenders on plastic to lose perks
Not long after credit card firms cut back on benefits offered to ordinary card users, it’s time for VVIP credit cards users to lose some perks such as free medical checkup vouchers at big hospitals.
Earlier this year, card companies cut benefits for ordinary users to make up expected losses from lowered commision rates that will be levied on small- and medium-sized businesses from September. That sparked criticism from the ordinary card holders that they were being discriminated against, and the financial regulator recommended the companies be fair with customers regardless of their income bracket.
“Our financial condition won’t be healthy when we cut commission rates for small businesses next month,” said an employee at KB Kookmin Card. “In addition to ordinary credit cards, we also decided to cut some benefits given to VVIP customers.”
Mostly card companies including Shinhan, KB Kookmin, Samsung, Lotte and Hyundai will put a maximum spending limit for certain free gifts starting next year. But some perks are being done away with entirely
Starting next year, KB Kookmin Card will stop providing a highly attractive visiting nurse service. The company paid nurses to visit the homes of VVIP members to give them medical checkups.
It will also stop giving mileage points to VVIP card holders when they purchase goods on three-month installment plans.
Lotte Card originally gave free flight tickets and medical checkup vouchers to all VVIP card holders regardless of how much they spent. Starting next year it will have a minimum monthly spending amount, although it hasn’t decided on the amount.
Hyundai Card has been giving away 200,000 won ($177) gift certificates that can be used at luxury fashion houses to customers who signed up for its Purple Card. In the future, it will give vouchers when a customer spends over 500,000 won in the first year of membership. In the succeeding years, card holders will have to spend over 6 million won per year.
According to companies, there are around 4,000 VVIP card holders who pay an average 2 million won in annual membership fees.
They can spend up to 100 million won per month. Ordinary card holders have limits depending on their spending history and credit ratings.
Sources said VVIP customers are the most valuable for card issuers.
“VVIP card holders spend an average of 10 million won per month and their delinquency rate and membership withdrawals are near zero,” said another employee at a credit card company.
By Kim Mi-ju [firstname.lastname@example.org]
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