KB Kookmin Card has many kinds of credit cards, including the Good Day All-in Card, which gets cardholders a discount at service stations; Good Shopping Card, which is good for a discount at marts; Dadam Card, which earns points for accumulation at certain member restaurants; and the Youth Boulevard Card, which is good for a discount at designated coffee shops.
In the past, the holders of these cards had to have them on their person to get the benefits from using the cards, but no more.
Now, only one KB Kookmin Alpha One Card will do the job. KB Kookmin Card issued the card in September, a Fintech product, for the first time in Korea’s financial industry, as part of the company’s strategy to zero in on what exactly customers want. The company has been working on a plan from early this year to focus its operations on customer value by switching to an “information business” to reset its management strategy. The Alpha One Card comes with all the benefits the four cards bring to their holders so they don’t have to carry all four cards all the time.
KB Kookmin Card, the credit card unit of Kookmin Bank, said it has reduced the minimum commissions on installment payments for billing by 1 percentage point, and those for cash advances by 0.5 percentage point from Sept. 28.
It means that the credit card firm has cut fees between 10 percent and 13.5 percent on installment payments, and the commissions on cash advances will stand between 8.5 percent and 26.95 percent.
Officials of the credit card firm said the company readjusted the fees based on the cost of funds they borrow from other financial institutions twice a year, and this time around they cut fees reflecting reduced borrowing costs as the Bank of Korea cut the benchmark interest rates in June.
Since its introduction only three weeks ago, around 8,000 Alpha One Cards have been issued . Its popularity stems mainly from the fact that the new credit card provides all the benefits associated with other cards on the market.
“The rate discount is clearly a minus factor on bank profits, but the increasing use of credit cards following tax benefits next year and the ameliorating economy may offset the loss,'' said Ryu Jae-chul, an analyst at TongYang Investment Bank. “
Banks, whose net interest margins are falling, have focused on the credit card business as a new growth engine. According to the Korea Investment and Securities, banks made 47.8 percent of their commission income from credit card businesses. Commissions from fund sales, meanwhile, took up only 10 percent of the total commission income.
With strict regulations on the housing mortgages businesses, banks have strengthened credit card marketing efforts this year.
KB Kookmin Card has launched a new credit card called "K-World" in partnership with JCB International.
The card lowered the fees it charged when members use their cards overseas by 50 percent to 0.5 percent.
Currently Visa and MasterCard users must pay 1 percent transaction fees for every purchase they make overseas. American Express Card members pay 1.4 percent in fees. The total overseas credit card transaction volume last year was $10.56 billion and Korean credit card users paid a total of 107.2 billion won in transaction fees to international card issuers.
A model displays a KB Kookmin Alpha One Card, which can provide all the benefits that all other credit cards issued by the company including discounts and points for accumulation to name some.(Photos: KB Kookmin Card)
