리볼빙 신용등급While watching the economic news, I noticed that credit card revolving (partial payment amount carryover agreement) balances had increased since the 2008 global financial crisis.
It was confirmed that the maximum was recorded. People who have been pushed out of the loan barrier due to strengthened lending regulations
It is analyzed that the revolving service was used.
Excluding BC Card, the revolving balance of 7 credit card companies including Shinhan, KB Kookmin, Samsung, Hyundai, and Lotte Woori
As of the end of last year, it was KRW 14.8489 trillion, a 17.8% increase over the previous year.
Looking at the amount of increase alone, it is said to be the second highest since 2008 (26.3%) during the global financial crisis.
What is revolving (partial payment amount carryover agreement)?
Revolving allows you to pay only a certain percentage of the credit card amount or the minimum payment amount, and the remaining amount is carried over to the next month.
Interest is charged on the carried over balance. From the consumer’s perspective, there is an advantage in that the burden of repayment is reduced by delaying payments that must be repaid immediately.
What if this revolving carryover balance gradually accumulates???
The current revolving interest rate is equivalent to the legal highest interest rate of 20% per annum.
The weighted average interest rate of the revolving carryover balance reached a maximum of 18.52% per annum (Lotte). KB Kookmin Card (17.76%) and Woori Card (17.60%) are also at high levels.
You can see that the interest rates are extremely high.
Although the pros and cons are clear, it can be tempting to default.
What are the advantages of revolving (partial payment amount carryover agreement)?
1. If your financial situation is poor, you can postpone your credit card payment without paying the minimum amount by paying only the minimum amount.
2. You can continue to use the card within the remaining limit without delinquency or card suspension.
…
….
…..
I’m not sure about any other advantages.
Disadvantages of revolving (partial payment amount carryover agreement)?
1. The carryover balance of revolving, which was used as a temporary measure, begins to accumulate.
2. Need to pay high interest rates
3. The carryover amount is ultimately a loan. The more carryover amount accumulated compared to income, the more it affects your credit rating.
In the end, you will have to pay high interest rates to prevent late payments.
The carryover amount gradually accumulates.
If you lower the payment contract ratio from 90% → 70% → 50% → 30% → 10%,
What do credit card companies think?
Oh, he can’t repay it, but he’s still using the card?
Then, the card company’s internal rating fell.
1. Increased fees
2. Credit rating downgraded
3. This is the most important: Reduction in usage due to credit rating downgrade
-I am making a living by revolving while maximizing my limit with full, but the limit is being reduced?
There is no answer. You will be subject to procedures for credit delinquency.
If your installment balance is high compared to your usage limit, your credit rating will be affected.
If you borrow more than you repay, your credit rating will be affected.
Free payment service, revolving service, also, if the carryover balance accumulates and the undelivered amount, which is money that has not yet been repaid, accumulates,
Your credit rating will be affected.
All of these have a negative impact on your credit rating.
Just applying for the revolving service will not affect your credit rating.
However, if carryover balances accumulate, it will have a negative impact on your credit rating.
The ‘probability’ is high.
Revolving services can form wrong spending habits in people in their 20s who lack financial experience, such as those who are new to society.
Looking back, when we just came out into society
Since there were not many loans, principal and interest repayment amount, principal equal repayment method, principal and interest equal repayment, incremental growth method, etc.
You didn’t know much.
If you receive a cash advance, your credit rating may go down.
How much of a negative impact will it have on your credit rating if you use a credit card loan from a credit card company other than a financial institution?
If your credit rating is too low, you cannot even use side loans or low-income policy loan products.
Correct financial consumption is essential whether you are young or old.
Of course, I do not use the revolving service.
https://www.news1.kr/articles/?4689397
Credit card revolving increased by 17% last year… COVID-19 insolvency ‘warning light’
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