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Weigookin74
Joined: 26 Oct 2009
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 Posted: Wed Aug 21, 2013 3:50 am Post subject: |
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| 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. |
I can agree with that to a point, but limiting people's ability to spend and get credit can also hold back an economy. Sometimes, you have to spend money to make money. Makes it hard to start a quality business. Prob why so many small businesses here that can never become bigger or expand.
I can attest to American credit cards. I briefly worked in Canadian call center that had a US credit card company as a client. (I dealt with Americans on the phone.) It was insane how people would have their interest rates re-priced for even having a payment post one day late, even if they paid it online before the date, itself. People were hit also with past due fees and overlimit fees.
No such thing in Canada. You miss payments or are late, it gets reported on your credit rating and it makes it harder to get credit in the future or you could be offered lower limits because of that. My understanding is that credit is harder to obtain in Canada than the USA, but nothing like in Korea. In Canada, prob like America, you can carry a balance and if you have a good payment history, the credit limit gradually increases over time. |
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alongway
Joined: 02 Jan 2012
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| Posted: Wed Aug 21, 2013 4:54 am Post subject: |
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| No such thing in Canada. You miss payments or are late, it gets reported on your credit rating and it makes it harder to get credit in the future or you could be offered lower limits because of that. My understanding is that credit is harder to obtain in Canada than the USA, but nothing like in Korea. In Canada, prob like America, you can carry a balance and if you have a good payment history, the credit limit gradually increases over time. |
Sometimes yes, sometimes no. But good payments will cancel missed ones rather quickly. I had some issues with a couple bank transfers that caused me to be late a couple times in Canada, even missed one. 6 months later the credit card company was offering me another $5000 on top of what I already had.
They also regularly offer me that every few months. The credit card culture between Canada and the US is not really that different at all. people carry huge amounts, people miss payments, and it all carries on. |
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bmaw01
Joined: 13 May 2013
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| Posted: Wed Aug 21, 2013 6:53 am Post subject: |
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| wishfullthinkng wrote: |
"leave things alone"? if you open a business that no one wants or are a bad business man then of course you will go under.
take for example there's a street near where i live that is has more than half a dozen fried chicken shops in a very compact area. when one goes out of business (which seems to be the case quite often) then another one takes its place. it's flabbergasting and it's called bad business. trying to compete against 9 other fried chicken places right next to you is what koreans tend to try and do, but anyone who passed econ 101 knows that's not a very good idea.
as for your situations who could possibly know besides those involved? in a city that has more businesses in one block than most small american towns do in their entire township, turnover will be fast and often. |
It's the same where I live in New Jersey. Instead of chicken shops we have pizza shops on every street corner. I kid you not we had 7 pizza shops within a 2 block radius. It doesn't make sense. |
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Ralph Winfield
Joined: 23 Apr 2013
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| Posted: Wed Aug 21, 2013 7:14 am Post subject: |
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| NohopeSeriously wrote: |
I'm hearing rumors in Korean that a big Korean company could tank down between October and December of this year.
To make it clear. People are very desperate here when it comes to money. |
Samsung lost the law suit in the U.S. but will not sink. Thier earnings were down but they are a global behemoth - unless their books (3-4) are still as opaque as they were in the latter nineties. |
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Ralph Winfield
Joined: 23 Apr 2013
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| Posted: Wed Aug 21, 2013 7:18 am Post subject: |
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| bmaw01 wrote: |
| wishfullthinkng wrote: |
"leave things alone"? if you open a business that no one wants or are a bad business man then of course you will go under.
take for example there's a street near where i live that is has more than half a dozen fried chicken shops in a very compact area. when one goes out of business (which seems to be the case quite often) then another one takes its place. it's flabbergasting and it's called bad business. trying to compete against 9 other fried chicken places right next to you is what koreans tend to try and do, but anyone who passed econ 101 knows that's not a very good idea.
as for your situations who could possibly know besides those involved? in a city that has more businesses in one block than most small american towns do in their entire township, turnover will be fast and often. |
It's the same where I live in New Jersey. Instead of chicken shops we have pizza shops on every street corner. I kid you not we had 7 pizza shops within a 2 block radius. It doesn't make sense. |
Sorry for being off-topic: Do those pizzarias sell good or even very good pizza? If they all make high-end Italian-American pies, then they must have an adequate number of potential customers who'd enable them to make profits. |
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alongway
Joined: 02 Jan 2012
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| Posted: Wed Aug 21, 2013 7:30 am Post subject: |
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you have to remember that outside of a couple burrows in New York city, Seoul on average is several times denser than just about anywhere in the US, so you won't see the same kind of distribution there that you would here. A 5 minute scooter ride from an intersection might take you a KM in any direction giving you an effective range of easily 4 square KM, in my area that's worth 80,000 people. That's a pretty huge market for just one chicken place, or even a small handful of chicken places.
The reason you also see clumping of businesses is efficiency.
If some street has 3 bedding shops on it,and you want to open a bedding shop.. where are you going to open it? Unless you're going to go to a totally new area, if you're going to be in range of those places, you might as well be there beside them or at least near them. People will begin to think of that as the bedding shop street and if you open up on another street you'll get less business as people will be going to the other area.
Yes over saturation is silly, But it's on you to set yourself apart at that point. |
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jvalmer
Joined: 06 Jun 2003
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| Posted: Wed Aug 21, 2013 4:53 pm Post subject: |
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You guys do realize that Koreans have maybe 20 years of credit history. Before it was basically only those big Samsung-like companies, or the rich, that got any credit. You just can't throw the door open to credit to an unsuspecting populations. I shudder to think if Koreans had as free access to credit as the US.
Can you imagine some 20 year old Korean girl responsibly using a credit card? Wait a minute, Korea tried it 15 years ago, handing out credit and credit cards like candy. Credit companies like LG-card was brought to its knees and LG quickly sold it off. That's why the government slapped on a lot of restrictions on credit. |
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Weigookin74
Joined: 26 Oct 2009
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| Posted: Wed Aug 21, 2013 5:08 pm Post subject: |
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| jvalmer wrote: |
You guys do realize that Koreans have maybe 20 years of credit history. Before it was basically only those big Samsung-like companies, or the rich, that got any credit. You just can't throw the door open to credit to an unsuspecting populations. I shudder to think if Koreans had as free access to credit as the US.
Can you imagine some 20 year old Korean girl responsibly using a credit card? Wait a minute, Korea tried it 15 years ago, handing out credit and credit cards like candy. Credit companies like LG-card was brought to its knees and LG quickly sold it off. That's why the government slapped on a lot of restrictions on credit. |
Now, they're forced to go to loansharks (restrictive credit) and the men end up with broken legs and the women end up as hookers. |
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Weigookin74
Joined: 26 Oct 2009
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| Posted: Wed Aug 21, 2013 5:09 pm Post subject: |
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| Weigookin74 wrote: |
| jvalmer wrote: |
You guys do realize that Koreans have maybe 20 years of credit history. Before it was basically only those big Samsung-like companies, or the rich, that got any credit. You just can't throw the door open to credit to an unsuspecting populations. I shudder to think if Koreans had as free access to credit as the US.
Can you imagine some 20 year old Korean girl responsibly using a credit card? Wait a minute, Korea tried it 15 years ago, handing out credit and credit cards like candy. Credit companies like LG-card was brought to its knees and LG quickly sold it off. That's why the government slapped on a lot of restrictions on credit. |
Now, they're forced to go to loansharks (restrictive credit) and the men end up with broken legs and the women end up as hookers. |
But, why do folks always go from one extreme to another? Too easy credit should not result in too difficult to get credit. There ought to be a balanced approach. |
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Weigookin74
Joined: 26 Oct 2009
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| Posted: Wed Aug 21, 2013 5:11 pm Post subject: |
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| alongway wrote: |
| Quote: |
| No such thing in Canada. You miss payments or are late, it gets reported on your credit rating and it makes it harder to get credit in the future or you could be offered lower limits because of that. My understanding is that credit is harder to obtain in Canada than the USA, but nothing like in Korea. In Canada, prob like America, you can carry a balance and if you have a good payment history, the credit limit gradually increases over time. |
Sometimes yes, sometimes no. But good payments will cancel missed ones rather quickly. I had some issues with a couple bank transfers that caused me to be late a couple times in Canada, even missed one. 6 months later the credit card company was offering me another $5000 on top of what I already had.
They also regularly offer me that every few months. The credit card culture between Canada and the US is not really that different at all. people carry huge amounts, people miss payments, and it all carries on. |
My main point was and the main difference is that you don't get charged higher interest or past due or over limit fees like in the USA. Consumers seem to have more protections in that regard in Canada. A late payment is miniscule if most of your payments are made on time and even if it's made within 30 days of the due date (slightly late), it often isn't reported to the credit bureau. Most cards won't cut you off until you're 90 days past due. Even then, if you pay it shortly after this, you may get the card back. (Just don't wait too long.) |
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jvalmer
Joined: 06 Jun 2003
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| Posted: Wed Aug 21, 2013 5:34 pm Post subject: |
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| Weigookin74 wrote: |
| Weigookin74 wrote: |
| jvalmer wrote: |
You guys do realize that Koreans have maybe 20 years of credit history. Before it was basically only those big Samsung-like companies, or the rich, that got any credit. You just can't throw the door open to credit to an unsuspecting populations. I shudder to think if Koreans had as free access to credit as the US.
Can you imagine some 20 year old Korean girl responsibly using a credit card? Wait a minute, Korea tried it 15 years ago, handing out credit and credit cards like candy. Credit companies like LG-card was brought to its knees and LG quickly sold it off. That's why the government slapped on a lot of restrictions on credit. |
Now, they're forced to go to loansharks (restrictive credit) and the men end up with broken legs and the women end up as hookers. |
But, why do folks always go from one extreme to another? Too easy credit should not result in too difficult to get credit. There ought to be a balanced approach. |
Only a few years ago was a massive world-wide credit crisis. Korea isn't going to make credit easier to get with that in very recent memory. |
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Steelrails
Joined: 12 Mar 2009
Location: Earth, Solar System
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| Posted: Wed Aug 21, 2013 7:46 pm Post subject: |
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| I love how people seem to believe that credit card companies and banks exist to throw money at them. |
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cdninkorea
Joined: 27 Jan 2006
Location: Seoul
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| Posted: Thu Aug 22, 2013 4:52 am Post subject: |
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| Weigookin74 wrote: |
| Weigookin74 wrote: |
| jvalmer wrote: |
You guys do realize that Koreans have maybe 20 years of credit history. Before it was basically only those big Samsung-like companies, or the rich, that got any credit. You just can't throw the door open to credit to an unsuspecting populations. I shudder to think if Koreans had as free access to credit as the US.
Can you imagine some 20 year old Korean girl responsibly using a credit card? Wait a minute, Korea tried it 15 years ago, handing out credit and credit cards like candy. Credit companies like LG-card was brought to its knees and LG quickly sold it off. That's why the government slapped on a lot of restrictions on credit. |
Now, they're forced to go to loansharks (restrictive credit) and the men end up with broken legs and the women end up as hookers. |
But, why do folks always go from one extreme to another? Too easy credit should not result in too difficult to get credit. There ought to be a balanced approach. |
It's an extreme country.
Okay, snarky comment aside: Politics (and central planning) in general doesn't often result in balanced solutions. |
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nicwr2002
Joined: 17 Aug 2011
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| Posted: Fri Aug 23, 2013 9:06 pm Post subject: |
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| 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. |
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byrddogs
Joined: 19 Jun 2009
Location: Shanghai
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| Posted: Fri Aug 23, 2013 10:48 pm Post subject: |
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| Steelrails wrote: |
| I love how people seem to believe that credit card companies and banks exist to throw money at them. |
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