More than seven out of ten customers who used cash advance services at major South Korean credit card companies are paying interest rates close to the legal maximum of 20% per year, according to industry data. A simple calculation shows that borrowing 5 million won (approximately $3,700) at a 19% annual rate for one year would accrue roughly 950,000 won (approximately $700) in interest alone.
According to member distribution data by applied interest rate bracket disclosed by the Credit Finance Association of Korea on the 5th, 83.16% of KB Kookmin Card cash advance users fell within the 18–20% annual interest bracket—the highest proportion among eight standalone card issuers. Shinhan Card followed at 79.37% and Hyundai Card at 79.13%, both approaching the 80% threshold.
Samsung Card recorded 76.93%, Lotte Card 75.63%, Woori Card 74.87%, and Hana Card 71.74%. Excluding BC Card, all seven standalone card companies had more than 70% of their cash advance users paying rates in the 18–20% range. BC Card showed a relatively lower share at 37.92%.
Unlike bank loans, cash advances require no separate documentation or complex credit review, making them a go-to product for consumers in urgent need of funds. However, the fact that the vast majority of actual users are concentrated in a high-rate bracket just 2 percentage points below the legal cap has drawn criticism.
The high-rate concentration was equally pronounced in revolving credit, which allows cardholders to carry over a portion of their monthly payment to the following month. Hyundai Card had the highest share, with 63.39% of revolving credit users paying 18–20% annual interest. KB Kookmin Card followed at 62.74% and Lotte Card at 62.45%.
Shinhan Card recorded 55.25%, Hana Card 54.74%, and Woori Card 50.80%. Six of the eight standalone card issuers had more than half of their revolving credit users in the 18–20% bracket.
Card loans—longer-term installment loans offered by card companies—showed a relatively lower concentration of high-rate users compared to cash advances and revolving credit. Among card loan users, Lotte Card had the highest share in the 18–20% bracket at 39.48%, followed by Hyundai Card at 36.56%. Woori Card recorded 27.20% and Samsung Card 25.63%.
The table below summarizes the share of users in the high-rate bracket by major standalone card issuer.
| Card Issuer | Cash Advance | Revolving Credit | Card Loan |
|---|---|---|---|
| KB Kookmin Card | 83.16% | 62.74% | – |
| Shinhan Card | 79.37% | 55.25% | – |
| Hyundai Card | 79.13% | 63.39% | 36.56% |
| Samsung Card | 76.93% | – | 25.63% |
| Lotte Card | 75.63% | 62.45% | 39.48% |
| Woori Card | 74.87% | 50.80% | 27.20% |
| Hana Card | 71.74% | 54.74% | – |
| BC Card | 37.92% | – | – |
Note: Share of actual users falling within the 18–20% annual interest bracket. “-” indicates items not separately aggregated in the relevant disclosure.
The current legal maximum interest rate in South Korea is 20% per year. The Financial Services Commission has stated that the legal cap applies to transactions with all financial institutions. The 18–20% range sits within 2 percentage points of the cap, effectively placing these rates near the ceiling.
The annual simple interest of 950,000 won on a 5 million won principal is calculated as “5 million won × 19%.” Actual interest burdens vary depending on the amount borrowed, the applied rate, and the repayment schedule. The disclosed percentages also represent the proportion of all users falling within the 18–20% bracket, not an average of individual rates applied to users.
With South Korean banks recently tightening household loan management, concerns have emerged that borrowers who cannot secure sufficient bank credit may shift to more accessible card financing, potentially increasing the interest burden on financially vulnerable borrowers.
A financial industry source said, “Cash advances and revolving credit are convenient options when funds are temporarily short, but given their high rates, prolonged use can quickly escalate the burden. Consumers should thoroughly review the applicable interest rate and repayment plan before using these products.”