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Korean Job Discussion Forums
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alongway
Joined: 02 Jan 2012
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 Posted: Fri Aug 23, 2013 10:50 pm Post subject: |
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| nicwr2002 wrote: |
| wishfullthinkng wrote: |
| Weigookin74 wrote: |
He had repetedly told me loans and credit is hard to get here. He finally after many years got a seven million won credit card and many other Koreans were shocked at how "high" it was. Thing is, he's got quite a few American cards that were much, much higher. Maybe one of his cards was 50,000 bucks. (Yeah, he's no English teacher.)
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korean credit cards and american cards could not be more different. korean credit cards are designed to inherently discourage overspending and borrowing while american cards are designed to be exactly the opposite.
american credit cards are set up to encourage people to go as deep into debt as they can by giving huge limits and silly low "introductory" interest rates. then they slap delinquent cc owners with insane interest rates that are nearly impossible to recover from after one missed payment because that's a major way credit card companies make money.
korean cards however don't give you introductory rates, they don't give absurdly high limits outside of what is feasible for each individual (thus why 7mil is shockingly high here because to spend 7mil in one month is out of reality for a typical korean) and they require full repayment of your balance each month which combined with said limit severely limits spending beyond your means. IF you cannot repay your balance on any given month then it's an immediate interest charge with the high rate that is clearly stated and given at the time of the credit card approval on whatever you cannot pay off and the card is cut off immediately. you cannot keep using it until you hit your limit like you can with an american card. needless to say, most people pay off that difference fairly quickly. |
That to me makes it even pointless to have a credit card then. The point of the credit card is to make a purchase on something that you would normally have to save up for for a long period of time. If you have to pay the balance back in just 30 days or less, then why even charge it in the first place? Most people are only paid once a month in this country as well. So, really there is no need for anyone to have a credit card. |
Because in Korea you split your payments over months manually rather than through the card company. When you buy something worth 300,000 at emart, you tell them to split it over 3 months and pay 100,000 each month. |
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byrddogs
Joined: 19 Jun 2009
Location: Shanghai
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| Posted: Fri Aug 23, 2013 11:33 pm Post subject: |
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| alongway wrote: |
| nicwr2002 wrote: |
| wishfullthinkng wrote: |
| Weigookin74 wrote: |
He had repetedly told me loans and credit is hard to get here. He finally after many years got a seven million won credit card and many other Koreans were shocked at how "high" it was. Thing is, he's got quite a few American cards that were much, much higher. Maybe one of his cards was 50,000 bucks. (Yeah, he's no English teacher.)
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korean credit cards and american cards could not be more different. korean credit cards are designed to inherently discourage overspending and borrowing while american cards are designed to be exactly the opposite.
american credit cards are set up to encourage people to go as deep into debt as they can by giving huge limits and silly low "introductory" interest rates. then they slap delinquent cc owners with insane interest rates that are nearly impossible to recover from after one missed payment because that's a major way credit card companies make money.
korean cards however don't give you introductory rates, they don't give absurdly high limits outside of what is feasible for each individual (thus why 7mil is shockingly high here because to spend 7mil in one month is out of reality for a typical korean) and they require full repayment of your balance each month which combined with said limit severely limits spending beyond your means. IF you cannot repay your balance on any given month then it's an immediate interest charge with the high rate that is clearly stated and given at the time of the credit card approval on whatever you cannot pay off and the card is cut off immediately. you cannot keep using it until you hit your limit like you can with an american card. needless to say, most people pay off that difference fairly quickly. |
That to me makes it even pointless to have a credit card then. The point of the credit card is to make a purchase on something that you would normally have to save up for for a long period of time. If you have to pay the balance back in just 30 days or less, then why even charge it in the first place? Most people are only paid once a month in this country as well. So, really there is no need for anyone to have a credit card. |
Because in Korea you split your payments over months manually rather than through the card company. When you buy something worth 300,000 at emart, you tell them to split it over 3 months and pay 100,000 each month. |
You got a link for this? |
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optik404
Joined: 24 Jun 2008
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| Posted: Fri Aug 23, 2013 11:55 pm Post subject: |
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| alongway wrote: |
| nicwr2002 wrote: |
| wishfullthinkng wrote: |
| Weigookin74 wrote: |
He had repetedly told me loans and credit is hard to get here. He finally after many years got a seven million won credit card and many other Koreans were shocked at how "high" it was. Thing is, he's got quite a few American cards that were much, much higher. Maybe one of his cards was 50,000 bucks. (Yeah, he's no English teacher.)
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korean credit cards and american cards could not be more different. korean credit cards are designed to inherently discourage overspending and borrowing while american cards are designed to be exactly the opposite.
american credit cards are set up to encourage people to go as deep into debt as they can by giving huge limits and silly low "introductory" interest rates. then they slap delinquent cc owners with insane interest rates that are nearly impossible to recover from after one missed payment because that's a major way credit card companies make money.
korean cards however don't give you introductory rates, they don't give absurdly high limits outside of what is feasible for each individual (thus why 7mil is shockingly high here because to spend 7mil in one month is out of reality for a typical korean) and they require full repayment of your balance each month which combined with said limit severely limits spending beyond your means. IF you cannot repay your balance on any given month then it's an immediate interest charge with the high rate that is clearly stated and given at the time of the credit card approval on whatever you cannot pay off and the card is cut off immediately. you cannot keep using it until you hit your limit like you can with an american card. needless to say, most people pay off that difference fairly quickly. |
That to me makes it even pointless to have a credit card then. The point of the credit card is to make a purchase on something that you would normally have to save up for for a long period of time. If you have to pay the balance back in just 30 days or less, then why even charge it in the first place? Most people are only paid once a month in this country as well. So, really there is no need for anyone to have a credit card. |
Because in Korea you split your payments over months manually rather than through the card company. When you buy something worth 300,000 at emart, you tell them to split it over 3 months and pay 100,000 each month. |
Can you still do this? I thought I saw something on the news last year about no longer being able to do this. Maybe it was just the 6/9 month payments. |
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denverdeath
Joined: 21 May 2005
Location: Boo-sahn
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| Posted: Sat Aug 24, 2013 12:35 am Post subject: |
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| optik404 wrote: |
| alongway wrote: |
| nicwr2002 wrote: |
| wishfullthinkng wrote: |
| Weigookin74 wrote: |
He had repetedly told me loans and credit is hard to get here. He finally after many years got a seven million won credit card and many other Koreans were shocked at how "high" it was. Thing is, he's got quite a few American cards that were much, much higher. Maybe one of his cards was 50,000 bucks. (Yeah, he's no English teacher.)
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korean credit cards and american cards could not be more different. korean credit cards are designed to inherently discourage overspending and borrowing while american cards are designed to be exactly the opposite.
american credit cards are set up to encourage people to go as deep into debt as they can by giving huge limits and silly low "introductory" interest rates. then they slap delinquent cc owners with insane interest rates that are nearly impossible to recover from after one missed payment because that's a major way credit card companies make money.
korean cards however don't give you introductory rates, they don't give absurdly high limits outside of what is feasible for each individual (thus why 7mil is shockingly high here because to spend 7mil in one month is out of reality for a typical korean) and they require full repayment of your balance each month which combined with said limit severely limits spending beyond your means. IF you cannot repay your balance on any given month then it's an immediate interest charge with the high rate that is clearly stated and given at the time of the credit card approval on whatever you cannot pay off and the card is cut off immediately. you cannot keep using it until you hit your limit like you can with an american card. needless to say, most people pay off that difference fairly quickly. |
That to me makes it even pointless to have a credit card then. The point of the credit card is to make a purchase on something that you would normally have to save up for for a long period of time. If you have to pay the balance back in just 30 days or less, then why even charge it in the first place? Most people are only paid once a month in this country as well. So, really there is no need for anyone to have a credit card. |
Because in Korea you split your payments over months manually rather than through the card company. When you buy something worth 300,000 at emart, you tell them to split it over 3 months and pay 100,000 each month. |
Can you still do this? I thought I saw something on the news last year about no longer being able to do this. Maybe it was just the 6/9 month payments. |
Yes, you can still do this. I did it two days ago with a samsung card. It's not automatic. Tell them "sam-gye-wol" when they tell you how much your purchases are. |
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War Eagle
Joined: 15 Feb 2009
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| Posted: Sat Aug 24, 2013 12:43 am Post subject: |
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| optik404 wrote: |
| alongway wrote: |
| nicwr2002 wrote: |
| wishfullthinkng wrote: |
| Weigookin74 wrote: |
He had repetedly told me loans and credit is hard to get here. He finally after many years got a seven million won credit card and many other Koreans were shocked at how "high" it was. Thing is, he's got quite a few American cards that were much, much higher. Maybe one of his cards was 50,000 bucks. (Yeah, he's no English teacher.)
|
korean credit cards and american cards could not be more different. korean credit cards are designed to inherently discourage overspending and borrowing while american cards are designed to be exactly the opposite.
american credit cards are set up to encourage people to go as deep into debt as they can by giving huge limits and silly low "introductory" interest rates. then they slap delinquent cc owners with insane interest rates that are nearly impossible to recover from after one missed payment because that's a major way credit card companies make money.
korean cards however don't give you introductory rates, they don't give absurdly high limits outside of what is feasible for each individual (thus why 7mil is shockingly high here because to spend 7mil in one month is out of reality for a typical korean) and they require full repayment of your balance each month which combined with said limit severely limits spending beyond your means. IF you cannot repay your balance on any given month then it's an immediate interest charge with the high rate that is clearly stated and given at the time of the credit card approval on whatever you cannot pay off and the card is cut off immediately. you cannot keep using it until you hit your limit like you can with an american card. needless to say, most people pay off that difference fairly quickly. |
That to me makes it even pointless to have a credit card then. The point of the credit card is to make a purchase on something that you would normally have to save up for for a long period of time. If you have to pay the balance back in just 30 days or less, then why even charge it in the first place? Most people are only paid once a month in this country as well. So, really there is no need for anyone to have a credit card. |
Because in Korea you split your payments over months manually rather than through the card company. When you buy something worth 300,000 at emart, you tell them to split it over 3 months and pay 100,000 each month. |
Can you still do this? I thought I saw something on the news last year about no longer being able to do this. Maybe it was just the 6/9 month payments. |
You can still split things up to 12 months. One way to test this is to log into Gmarket and act like you are purchasing something. On the payment screen, if you select credit card, you can see the payment splitting options. |
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alongway
Joined: 02 Jan 2012
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| Posted: Sat Aug 24, 2013 12:48 am Post subject: |
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| I think the story on the news was about them not being allowed to give no interest rates on longer splits to prevent people from overloading themselves with split payments. |
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Weigookin74
Joined: 26 Oct 2009
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| Posted: Sat Aug 24, 2013 5:44 am Post subject: |
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| alongway wrote: |
| nicwr2002 wrote: |
| wishfullthinkng wrote: |
| Weigookin74 wrote: |
He had repetedly told me loans and credit is hard to get here. He finally after many years got a seven million won credit card and many other Koreans were shocked at how "high" it was. Thing is, he's got quite a few American cards that were much, much higher. Maybe one of his cards was 50,000 bucks. (Yeah, he's no English teacher.)
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korean credit cards and american cards could not be more different. korean credit cards are designed to inherently discourage overspending and borrowing while american cards are designed to be exactly the opposite.
american credit cards are set up to encourage people to go as deep into debt as they can by giving huge limits and silly low "introductory" interest rates. then they slap delinquent cc owners with insane interest rates that are nearly impossible to recover from after one missed payment because that's a major way credit card companies make money.
korean cards however don't give you introductory rates, they don't give absurdly high limits outside of what is feasible for each individual (thus why 7mil is shockingly high here because to spend 7mil in one month is out of reality for a typical korean) and they require full repayment of your balance each month which combined with said limit severely limits spending beyond your means. IF you cannot repay your balance on any given month then it's an immediate interest charge with the high rate that is clearly stated and given at the time of the credit card approval on whatever you cannot pay off and the card is cut off immediately. you cannot keep using it until you hit your limit like you can with an american card. needless to say, most people pay off that difference fairly quickly. |
That to me makes it even pointless to have a credit card then. The point of the credit card is to make a purchase on something that you would normally have to save up for for a long period of time. If you have to pay the balance back in just 30 days or less, then why even charge it in the first place? Most people are only paid once a month in this country as well. So, really there is no need for anyone to have a credit card. |
Because in Korea you split your payments over months manually rather than through the card company. When you buy something worth 300,000 at emart, you tell them to split it over 3 months and pay 100,000 each month. |
So, the merchants themselves are forced to take on the risk themselves rather than the card companies? Do they charge interest for this privledge? I sure would be if I were a business. Otherwise, I'd be pissed. But, I suppose they jsut price it into their products forcing us all to pay more. |
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Steelrails
Joined: 12 Mar 2009
Location: Earth, Solar System
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| Posted: Sat Aug 24, 2013 5:46 pm Post subject: |
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| nicwr2002 wrote: |
That to me makes it even pointless to have a credit card then. The point of the credit card is to make a purchase on something that you would normally have to save up for for a long period of time. If you have to pay the balance back in just 30 days or less, then why even charge it in the first place? Most people are only paid once a month in this country as well. So, really there is no need for anyone to have a credit card. |
With Korean credit cards, you can get significant discounts on things like dining and shopping. Also, there is international online purchasing. |
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12ax7
Joined: 07 Nov 2009
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| Posted: Sat Aug 24, 2013 6:36 pm Post subject: |
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| Steelrails wrote: |
| nicwr2002 wrote: |
That to me makes it even pointless to have a credit card then. The point of the credit card is to make a purchase on something that you would normally have to save up for for a long period of time. If you have to pay the balance back in just 30 days or less, then why even charge it in the first place? Most people are only paid once a month in this country as well. So, really there is no need for anyone to have a credit card. |
With Korean credit cards, you can get significant discounts on things like dining and shopping. Also, there is international online purchasing. |
Yes, but I sometimes wonder if these rewards don't encourage retailers to increase their regular prices. For example, how can a gas station offer a 100won/L discount if you have the right card and still turn a profit? |
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northway
Joined: 05 Jul 2010
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| Posted: Sat Aug 24, 2013 8:51 pm Post subject: |
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| War Eagle wrote: |
| optik404 wrote: |
| Threequalseven wrote: |
Is it fair to say part of the reason Korean businesses don't experiment with "the new" is because it's such a homogenous country? How many people are willing to leave their comfort zone of kimchi and seolleongtang and try out a new Cuban restaurant instead?
It just seems if you open a chicken hof, and that doesn't work; then you open a convenience store, and that doesn't work; then you open a clothing store, and that's not working; what other options do you have except to try something new? I always thought that was what business is all about - coming out with the latest and greatest thing. Perhaps this is just a drawback of the copycat business culture here. I can see it now: *Tried and True, Nothing New!* |
Then how do all the foreign restaurants stay in business? |
Exactly. As can be said of a lot of threads in this forum, times are changing. The younger generation are not like their parents. They are open to many new ideas.
The older generation in Korea today: 1950's Western mindset
Their childern: Fast forward to the 2000's Western mindset
Many generations were skipped, and instead of a gradual change in the near future, diversity will come about quickly. Of course, this is just my educated guess, though you can see it happening already. |
Right, and particularly when it comes to food. In my experience, your average middle class suburban American kid is going to be a lot less willing to try new cuisines than your average young Korean. |
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wishfullthinkng
Joined: 05 Mar 2010
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| Posted: Sun Aug 25, 2013 6:32 pm Post subject: |
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| nicwr2002 wrote: |
That to me makes it even pointless to have a credit card then. The point of the credit card is to make a purchase on something that you would normally have to save up for for a long period of time. If you have to pay the balance back in just 30 days or less, then why even charge it in the first place? Most people are only paid once a month in this country as well. So, really there is no need for anyone to have a credit card. |
that's another area where korean credit cards differ from cards in other countries. they can do what are known as "installment payments". so let's say you have a 5 million credit line. if you want, you can buy a television that costs 3 million and break up the payments over let's say, 12 months to effectively only pay 250 per month for the tv. that however will leave you with only a 2million credit limit to use for that first month for other purchases, 2.25mil the next month, 2.5 mil the next, etc. etc. it's a great system and something that i think other countries like america should adopt.
also, i use my credit cards exclusively instead of cash for airline mileage and because you get a portion of all money spent on cc/debit cards back at the end of the year during tax time. you don't get any money back if you use cash unless you give your tax id number to the merchant every single time you make a transaction in cash which needless to say, is a huge pain in the ass and you get no mileage of any kind. |
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jdog2050
Joined: 17 Dec 2006
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| Posted: Sun Aug 25, 2013 7:04 pm Post subject: |
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To answer the OP:
The reasons businesses change here are many-fold and have been answered in the thread--bad business ideas, starting a business in order to actually live off bank loans, etc.
One thing that hasn't been brought up yet though is the idea of "kwaligeum". We all know key money, rent, etc, but kwaligeum is something that only comes up when you are about to purchase or rent a retail location.
In a word, it is essentially "buy out" money--it's a certain amount paid to the original proprietor of a place that *at the least* recoups their renovation costs, but because it is also calculated using "foot traffic" it can get really high if your area of the city is booming.
So let's say you bought a place in Itaewon back in the early 2000s. Maybe you had no kwaligeum or very low kwaligeum (low kwaligeum could be something like 10-20 million Won). Fast forward 10 years...the average kwaligeum in Itaewon is now like 100 million Won.
So, you definitely have people who buy a business with no or low kwaligeum so that they can triple or quadruple it in a couple of years when that area blows up.
Oh, and to add insult to injury kwaligeum is technically illegal. No one cares. Everyone does it.
Protip: rumor has it that kwaligeum on Hooker Hill is still really low/non-existant despite the fact that the area is booming.
On a separate note, the OP asked why there never seems to be a long-term business strategy. Pfft, I dunno man. I just ended my time as a curriculum developer. My honest take on things like Hagwons is that their owners were never really *interested in education*. It was only after they started their business that they realized that they were dealing with little human beings 24/7 and not squares in an excel chart. Now, to be fair, I did work at a Hagwon that was "pretty good". The owners were really interested in making sure the kids got a sound experience. But, neither owner came from an education background. You combine that with the *general* lack of long term planning in Korea and you get a work environment that is very stressful. The constant retooling of the curriculum comes from *panic*. Panic when they see even a *tiny* dip in student numbers. It's like they would never see the dip as natural (school year gets busy, students come and go, students want to be with their actual friends, etc) and instead that something was *wrong with the school*.
So instead of riding the dip out, not worrying about it, and instead think about a 3 year plan, they'd scrap everything and want a new curriculum within the next 6 months.
But yeah, at the end of the day I think it's the lack of long-term planning that kills even fairly successful Korean businesses.
Last edited by jdog2050 on Sun Aug 25, 2013 7:33 pm; edited 1 time in total |
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atwood
Joined: 26 Dec 2009
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| Posted: Sun Aug 25, 2013 7:10 pm Post subject: |
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| jdog2050 wrote: |
To answer the OP:
The reasons businesses change here are many-fold and have been answered in the thread.
One thing that hasn't been brought up yet though is the idea of "kwaligeum". We all know key money, rent, etc, but kwaligeum is something that only comes up when you are about to purchase or rent a retail location.
In a word, it is essentially "buy out" money--it's a certain amount paid to the original proprietor of a place that *at the least* recoups their renovation costs, but because it is also calculated using "foot traffic" it can get really high if your area of the city is booming.
So let's say you bought a place in Itaewon back in the early 2000s. Maybe you had no kwaligeum or very low kwaligeum (low kwaligeum could be something like 10-20 million Won). Fast forward 10 years...the average kwaligeum in Itaewon is now like 100 million Won.
So, you definitely have people who buy a business with no or low kwaligeum so that they can triple or quadruple it in a couple of years when that area blows up.
Oh, and to add insult to injury kwaligeum is technically illegal. No one cares. Everyone does it. |
I was told by a bar owner--former CJ foods exec--that this is the main way small business owners make money.They buy/start a small business and then sell it within two years. |
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radcon
Joined: 23 May 2011
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| Posted: Sun Aug 25, 2013 7:20 pm Post subject: |
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| jdog2050 wrote: |
To answer the OP:
The reasons businesses change here are many-fold and have been answered in the thread.
One thing that hasn't been brought up yet though is the idea of "kwaligeum". We all know key money, rent, etc, but kwaligeum is something that only comes up when you are about to purchase or rent a retail location.
In a word, it is essentially "buy out" money--it's a certain amount paid to the original proprietor of a place that *at the least* recoups their renovation costs, but because it is also calculated using "foot traffic" it can get really high if your area of the city is booming.
So let's say you bought a place in Itaewon back in the early 2000s. Maybe you had no kwaligeum or very low kwaligeum (low kwaligeum could be something like 10-20 million Won). Fast forward 10 years...the average kwaligeum in Itaewon is now like 100 million Won.
So, you definitely have people who buy a business with no or low kwaligeum so that they can triple or quadruple it in a couple of years when that area blows up.
Oh, and to add insult to injury kwaligeum is technically illegal. No one cares. Everyone does it. |
I don't understand how kwaliguem is able to exist. Your lease is up, you are quitting your business, I'm signing a new lease with the landlord, you need to leave, you have no say in the matter, you want money?- get bent. |
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atwood
Joined: 26 Dec 2009
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| Posted: Sun Aug 25, 2013 7:34 pm Post subject: |
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| Steelrails wrote: |
| Quote: |
| I always thought that was what business is all about - coming out with the latest and greatest thing. |
Not at all. Business is about making money. It is about identifying what people want to buy, or convincing people that they want to buy something, offering that product, and making money. Or figuring out some way to offer a service and making money.
It's not about creativity and invention. Those are means to an end. The end result is making money.
| Quote: |
| But it seems like the Korean business model is always short term thinking. |
Really? Then the economy should be a shambles. Actually, Korean industry and its varying successes in a wide variety of fields (electronics, computers, nuclear power, shipping, automobiles, etc.) and the fact that it took decades to establish those businesses would suggest that that is not the case.
Don't confuse some people opening up a restaurant with "The Korean Business Model".
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.[/quote]
But often, it takes "creativity and innovation" to be successful or remain successful. You can't always just copy the other guy.
McDonald's became a global behemoth though Ray Kroc's innovations and when its sales dip or are flat it's usually because their product line hasn't changed enough to keep customers interested.
Why are pizza places always introducing some new type of pizza or product? Because that's what drives sales back up after they plateau.
How does Walmart offer low prices, make a profit and crush the competition? Through supply line innovations.
Hard work goes a long way and the willingness to work long hours does as well, but creativity and innovation are what sets the real winners apart. You said it yourself--"figuring out some way." Businesses we take for granted now, such as supermarkets, were someone's innovations.
As for the Korean business model, small and big businesses aren't all that different in that it seems both mostly apply the fast follower technique.
Marketing of course is also a big part of business success and creativity is necessary there as well. Otherwise, Coke wouldn't be the real thing, nobody would be loving McDonald's, Walt Disney World wouldn't be the happiest place on earth, and according to the beer snobs who frequent this forum, no one would ever drink a Budweiser. |
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