Lee Hyo-jin covers the Bank of Korea, the banking industry and broader financial news. Her previous beats include foreign affairs, North Korea and general reporting on Korean society.
Parents skeptical about gov't decision to allow credit cards for minors
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By Lee Hyo-jin
Critics say early exposure to credit cards could fast-track teens into culture of overspending
The government’s decision to allow the issuance of credit cards to minors aged 12 and older has drawn skepticism from parents Tuesday, with some raising concerns about early exposure to overspending and the potential for delinquency.
Credit cards had previously been limited to adults aged 19 and older, but the minimum eligibility age was lowered through a revision to the enforcement decree of the Specialized Credit Finance Business Act, which took effect Monday.
A woman in her 40s surnamed Kim, who lives in Seoul’s Gangseo District and has a 13-year-old daughter, expressed doubts about the move, questioning whether a credit card is necessary when her child already has a debit card.
Her daughter currently uses KakaoBank's "mini card," a debit card designed for teenagers, through which she receives a monthly allowance of 100,000 won ($67).
"I don't see the need for a credit card, since it's ultimately a system where I have to pay for what my daughter spends," she said. "It feels like a policy designed to benefit card companies. If misused, it could lead to delinquencies or other side effects."
Lee, a man in his 40s living in Seoul's Mapo District with two elementary school children, also voiced skepticism, saying he has no plans to issue credit cards for them.
"Teenagers are still learning how to manage money, and a credit card could encourage overspending and send the wrong signal about spending beyond what they can afford," he said. "They may also start comparing credit limits with their friends, which could become a sensitive issue among peers."
The new policy allows minors aged 12 and older to be issued a so-called "family credit cards" in their own names with parental consent.
Authorities say the change will help close legal loopholes, as there had previously been no clear legal basis for underaged individuals using their parents' credit cards. They also expect the new policy to improve payment convenience and serve as a practical tool for financial education for children.
Students take a nationwide mock college scholastic ability test at a high school in Busan, March 24. Yonhap
However, public sentiment remains largely negative.
"Even now, many adults are filing for bankruptcy or undergoing financial rehabilitation. I don't see any need to extend credit cards to children," one user wrote on a Naver online community for parents.
Another commented, "In a worst-case scenario, parents with bad credit could open cards in their children's names and leave them with damaged credit."
Financial authorities say safeguards are in place. The default monthly spending limit is set at 100,000 won, rising to 500,000 won with parental consent.
Payment is restricted to categories such as transportation, stationery stores, convenience stores, bookstores and hospitals, while spending at entertainment and gambling-related venues is prohibited.
Seo Ji-yong, president of the Korean Credit Card Academic Society and a business administration professor at Sangmyung University, urged caution, saying the policy could carry risks as Korea moves toward a cashless society.
"While issuing credit cards to minors could help foster sound spending habits, spending limits, category restrictions, real-time payment alerts and parental oversight need to be strengthened as much as possible to prevent misuse," he said.
In the United States, credit card use among teenagers is often framed as a "credit piggy bank," a way to build a credit history early by accumulating card usage data. Experts say Korea should also go beyond payment convenience and focus on helping teenagers develop sound financial habits.