Card issuers on alert over potential delinquencies following gov’t credit amnesty

Credit card companies are expressing concern over potential risks to credit quality following the government’s recent large-scale credit amnesty, industry officials said Thursday. While around 290,000 people are now eligible to receive new credit cards under the amnesty, historical trends indicate a significant chance many of these individuals will become delinquent again. On Sept. 30, financial authorities implemented an amnesty, reinstating the credit of individuals and small business owners who have fully settled overdue debts. The program applies to overdue debts of up to 50 million won ($35,000), acquired from January 2020 through August this year, that are either already repaid or will be paid in full by the end of the year. The latest amnesty will restore the credit of some 3.7 million people, including 2.95 million individuals and 750,000 small business owners. Credit for 2.58 million people will be reinstated immediately, and delinquencies will be erased. Those who have yet to repay their debts in full will see their credit scores increase, as long as overdue amounts are settle