The reason why they use cards with an annual fee of 1 million won │ Magazine Hankyung

Graphics = Reporter Daun Jeong # Mr. A, an office worker in his 30s who is about to travel abroad this year. After searching for a card with many benefits and weighing the annual fee benefits and mileage accumulation rate, I ended up choosing a premium card. Mr. A said, “The annual fee is 200,000 won, but you can get the full amount back in the form of hotel spa, Shilla Duty Free Points, hotel brunch, etc.” and “If you receive Shilla Duty Free Points, you can accumulate more than 200,000 won depending on the exchange rate, so it seems to be more advantageous.” “He said.

One of the things to check when issuing a new card is the annual fee. This is a one-year membership fee paid to the card company, and the annual fee for a credit card with general discounts or savings benefits is around 20,000 to 30,000 won. Cards worth over 100,000 won are classified as premium cards. There are a variety of premium cards on the market tailored to consumer demand, including airline mileage accumulation cards, hotel brand PLCC (commercially labeled credit cards) cards, and voucher offering cards.

Premium cards provide greater benefits than the annual fee. For example, if a card with an annual fee of 500,000 won is issued, a voucher worth more than 500,000 won is provided. Consumers who spend tens or hundreds of dollars in annual fees have a low probability of delinquent card payments, and they basically have higher card performance, which is more profitable for the card company.

According to credit card platform Card Gorilla, the average annual fee for 44 types of credit cards released in the first half of this year is 113,225 won. It rose by 63% compared to last year (69,583 won).
If you are in your 20s and 30s and are pursuing a ‘hot vacation’
“There is an increasing number of people in their 20s and 30s who want to spend a day relaxing at a famous hotel, even if it means eating a 2,000 won gimbap for a meal.” (credit card industry official)

The 4050 generation with purchasing power were generally the main consumers of premium cards, but recently, the ‘2030 generation with economic power’ has rapidly emerged. Despite the high annual fee, if you issue a premium card, you can receive hotel accommodations equivalent to the annual fee and obtain a higher hotel room rating. It is an attractive product for the 2030 generation who enjoy hotel vacations (hotel + vacation).

In fact, among consumers who have issued Shinhan Card’s ‘Marriott Bonvoy Card’ in the past year, the proportion of people in their 20s and 30s reaches 40%. The annual fee ranges from 264,000 won (domestic only) to 267,000 won (overseas).

If you issue this card, you can use ‘Gold Elite’ level rooms as standard at Marriott chains around the world. This level is typically earned after a 25-night stay.

If you spend 60 million won in one year, your hotel membership level will be upgraded (platinum elite) the following year. However, considering that the average earned income per person for workers in their 30s is 42.62 million won (‘2018-2022 per centile data on earned income by age group’ submitted by Jin Seon-mi, a member of the Democratic Party of Korea, from the National Tax Service), there is room for surplus funds obtained through dual income or investments. Unless you have this, it is difficult to rise to Platinum Elite level.

Woori Card’s ‘ALL Woori Card Infinite’ also accounts for about 39% of the 2030 generation (as of September this year). The annual fee is higher than the Marriott Bonvoy card. It costs 500,000 won regardless of whether it is for domestic use or overseas use.

If you issue an All Infinite card, you can immediately obtain platinum status from Accor, a global hotel chain that operates Banyan Tree, Raffles, and Sofitel. This level is usually achieved after staying 60 nights. If you spend 35 million won per year, you can raise your hotel membership level the following year.

Hotel accommodation vouchers (points) equivalent to the annual fee are also given once a year. You can save on the annual fee just by receiving an accommodation voucher. Marriott Shinhan Card also provides free lodging once a year, a 50,000 won discount coupon for breakfast at participating domestic Marriott hotels (twice a year), and airport lounge benefits applicable to up to one accompanying person (four times a year).

Graphics = Reporter Jeong Da-un A cost-effective premium card
“I consider whether the card provides cash benefits that can be used immediately rather than future benefits, such as hotel use,” (person in his 30s on parental leave).

The annual fee for premium cards can be broadly divided into 100,000-300,000 won, 500,000 won, and 1 million won or more, but people in their 20s and 30s mainly use cards with a relatively lower annual fee of 100,000-300,000 won. Card companies view the influx of people in their 2030s positively as they can secure future generations as loyal customers. For this reason, premium card marketing in the 100,000 won range is in full swing recently.

Hana Card, which only issued premium cards with an annual fee of 2 million won or more to people with assets worth hundreds of millions of dollars or professionals such as large law firms, also launched the JADE series with a significantly lower annual fee starting this year. The annual fees for a total of four cards, including Jade Classic, Jade Prime, Jade First, and Jade First Centum, are 120,000 won (overseas use), 300,000 won, 600,000 won, and 1 million won, respectively.

In the case of Jade Classic, when you issue a card, you will receive 5 vouchers. ① 100,000 won on-site discount on hotel dining ② Shinsegae gift certificate 100,000 won mobile exchange voucher ③ SK mobile gas voucher 100,000 won ④ Baedal Minjok mobile gift certificate 100,000 won ⑤ 90,000 won Hana Money, etc. You can choose one of these.

For example, if you are a consumer who usually enjoys delivery food, you can select the Baedal Minjok mobile gift certificate as a voucher. In this case, you can enjoy benefits such as using the airport lounge (three times a year) by paying only 20,000 won (annual fee 120,000 won – voucher 100,000 won). However, after the card is issued, you can use the voucher if you spend more than 500,000 won, and from the following year, you must spend more than 6 million won in one year to receive the benefits.

According to the Card Gorilla chart, Jade Classic ranked first among 30 cards with an annual fee of 100,000 won or more in October. As of the end of September, more than 70,000 copies of the Jade series were issued.

Photo = Hana Card annual fee is 200,000 won, but there are cards with an actual fee of 0 to 50,000 won. It is ‘Hyundai Card Summit’. This card, which has an annual fee of 200,000 won regardless of whether it is domestic or overseas, provides a voucher worth 150,000 won when issued. You can receive it as a Shinsegae Department Store or Lotte Department Store gift certificate. If you exchange it for M Points, you can get up to 200,000 points. You can use the airport lounge for free up to 5 times a year.

Hyundai Card’s premium cards took second to fourth places (Card Gorilla Chart).

Photo = Hyundai Card If you enjoy shopping and traveling
“I am paying an annual fee of 20,000 to 30,000 won and receiving no benefits, so I am wondering whether I should switch to a smart premium card.” (Office worker in his 50s with two children in college)

The 4050 generation is the generation that spends the most money. We spend it not only for ourselves, but also for our children and parents. Depending on the activities you focus on, such as shopping, travel, golf, etc., choosing a premium card may be more beneficial.

Lotte Card’s ‘Lotte Department Store Flex’ accumulates 7% of the payment amount as L.POINT at overseas luxury goods and contemporary stores of Lotte Department Store and Lotte Outlet. However, the maximum is 100,000 points per month. The previous month’s performance must be over 1 million won. If you spend more than 1 million won last month and buy a luxury bag worth 2 million won, you will accumulate 100,000 won points. This means purchasing a product for 1.9 million won. There is also a 7% on-site discount at Lotte Department Store. Up to 200,000 won per year. The annual fee is 100,000 won, regardless of whether it is for domestic use or overseas use.

Consumers who travel a lot need to accumulate airline mileage. The ‘IBK Industrial Bank K22’ card accumulates 1-2 Korean Air mileage per 1,500 won of payment amount. If you spend more than 6 million won per year, one of five types of vouchers will be provided once a year. You can choose between a gift certificate worth 150,000 won or 130,000 top points. The annual fee is 220,000 won for overseas use.

There is also a card specialized for Singapore Airlines, a foreign airline. The ‘Singapore Airlines Shinhan Card’ accrues 2 to 3.5 miles of Singapore Airlines’ Kris Flyer membership mileage per 1,500 won spent. In addition, 15,000 mileage per year is provided as standard, and additional mileage is provided depending on annual usage performance. The annual fee is 250,000 won for overseas use.

Singapore Airlines is the national airline of Singapore and operates in 121 cities in 38 countries around the world. In addition to Singapore Airlines, ‘KrisFlyer mileage’ includes Asiana, United, and Lufthansa.

THE iD of Samsung Card. TITANIUM (DI Titanium) has an annual fee (overseas use) of 700,000 won. It is good to use when using hotels, golf, and shopping. You can receive voucher benefits twice a year, such as an on-site discount of 250,000 won on room and dining services at domestic luxury hotels such as Grand Hyatt Seoul, Seoul Shilla Hotel, and Chosun Palace. A discount of 250,000 won is provided when using golf courses such as Gapyeong Benest Golf Club (on-site discount) or at stores directly managed by Samsung C&T brands such as Comme des Garçons and Maison Kitsune.

In addition, when paying more than 100,000 won at Interpark tickets, golf courses, or online shopping malls (SSF SHOP, etc.), a payment discount of 50,000 won is provided once a month, three times a year.
A VVIP card that not everyone can use, of course benefits beyond the annual fee
The membership conditions for VVIP cards targeting high-net-worth individuals are quite strict. It is not known how many cards Hyundai Card’s ‘The Black’, known as Korea’s first VVIP card, has been issued so far, but it is estimated that the total number of people who own the cards does not exceed 1,000. The Black’s last number is 1000. Last September, the annual fee was increased from 2.5 million won to 3 million won.

Hyundai Card sends out invitations to sign up to those who meet the conditions, and when they receive a response indicating their intention to join, the issue is decided after discussion by the internal review committee. Among celebrities, it is known that actor Lee Jung-jae, singer G-Dragon, and Lisa of the group Blackpink own it.

Hyundai Card’s representative premium card. Photo = Hyundai Card Woori Card’s TWO CHAIRS Black, which became an issue as it is the card used by singer and actress IU, also has membership conditions such as an average half-year balance of 5 billion won or more and an annual fee (overseas use) of 2.5 million won. This is known to be tricky.

VVIP cards provide benefits beyond the annual fee. Just looking at the Two Chairs card, it provides cash benefits (gift vouchers) equivalent to the annual fee. It includes 1 million Moa points that can be used when making card payments, 1 million won gift certificates for department stores of your choice among Shinsegae, Lotte, and Hyundai, and 500,000 won dining vouchers for premium hotels such as JW Marriott Dongdaemun.

If you receive CLUB 1 (Club 1) 200 from Hana Card, which has an annual fee of 2 million won for overseas use, you can select a seat upgrade (Business → First, Business Suite) or a companion business flight ticket when using Korean Air or Asiana Airlines. You receive benefits equal to the annual membership fee. If you choose a companion business airline ticket, you can travel to the Americas, Europe, the Middle East, and Oceania once a year, and to Southeast Asia, Japan, and China up to three times a year.

Reporter Kim Tae-rim tae@hankyung.com