Check card: smart addition to your wallet

By James Dixon

With prices for staples like food, housing and gas on the rise, “smart spending” is more crucial than ever and when you really feel the pinch, excessive spending is not an option.

As consumers are becoming more concerned about smart asset management, check cards have fast become the preferred plastic in many wallets.

With a check card, people can make a payment directly from a checking or savings account. Check cards have become a complement to credit cards, as consumers around the world are “compartmentalizing” spending.

For example, many consumers now use credit cards for higher value purchases and check cards for purchases made traditionally with cash.

At its core, the use of check cards helps to stay on budget, prevent overspending and minimize debt. Check cardholders can enjoy both convenience and security with the ability to make purchases around the clock and the assurance that they won’t spend beyond their means.

There is no need to seek out an ATM, and all you have to do is swipe and sign. In terms of security, check cards are safer as you don’t have to carry around cash.

The demographic of check cardholders has expanded considerably. While the main check cardholder group consists of young working professionals, the population of check cardholders has expanded to include other budget-minded consumers like college students and housewives.

The key attributes of check cards ― convenience, security and smart spending ― truly satisfies the lifestyle of diverse consumer groups around the world.

The check card has become so widespread that it has replaced cash or credit card transactions in many countries.

The market share of check cards in the electronic payment industry in the U.S. and Europe stands high at 40.7 percent and 60 percent, respectively. Also, the check card is considered a cost-efficient way to manage operational expenses in these countries.

Korea is no different than other countries, as the market for check cards has recently been on an upswing as well. Check cards made up only 9 percent of the market share of electronic payments in 2009, but that number is continuously increasing.

The number of cards issued per year has seen a dramatic increase. According to the statistic data from Bank of Korea, 19,620,000 check cards were issued as of 2005.

Five years later, the number of check cards issued stood at 74,180,000, a 278 percent increase and a 15.5 percent increase from 2009.

Additionally, the daily use of check cards last year included 3,880,000 transactions and approximately 142 billion Korean Won in spending on average, a 35 and 42 percent increase from 2009, respectively, according to the Bank of Korea.

These increases can likely be attributed to the fact that Korea offers numerous advantages to check cardholders compared with other markets. For example, wide acceptance means check cards can be used for even small value transactions.

There are also often discounts for check cardholders who make transactions in places like fast food chains, movie theaters and bookstores. Furthermore, one of the best advantages of using check cards in Korea can be seen during year-end tax preparation.

Check cards yield a 5 percentage points higher tax deduction compared to credit cards and cash.

With all of these benefits and the recovery of the global economy, it is easy to see why check cards are rapidly becoming a popular payment option for consumers around the world and here in Korea.

They are convenient, safe and effective for careful money management. Overall, the check card is a convenient and smart addition to your wallet.