A view of using a transit card (Image courtesy of Yonhap)
SEOUL, July 15 (Korea Bizwire) — In a move aimed at easing daily financial burdens on low-credit individuals, South Korea’s financial authorities are considering allowing postpaid transit card functions for people undergoing debt workout programs.
The initiative is part of President Lee Jae-myung’s broader policy agenda to support financially distressed small business owners and delinquent borrowers.
Currently, individuals in credit rehabilitation programs are barred from using any form of postpaid credit, including postpaid transportation cards, effectively cutting off a basic means of commuting. This restriction has led to a cycle where those most in need of income opportunities face further barriers to economic participation.
The Financial Services Commission (FSC) is reviewing the feasibility of enabling these individuals to use check cards embedded with small-scale postpaid transit functions. Discussions with credit card companies are underway.
Korea Mulls Transit Card Access for Debtors in Credit Rehab Programs (Image supported by ChatGPT)
One card company official confirmed that the government had reached out to gauge industry support, and firms were willing to cooperate on public interest grounds.
Under the plan, individuals who already hold a bank account and debit card could gain access to limited postpaid transit services. The system would start with small credit limits — likely around the standard ₩300,000 monthly cap — and could be gradually expanded based on responsible usage and repayment history.
For those who are barred from holding even basic bank accounts due to severe delinquencies, the FSC is also exploring narrowly defined access to essential financial tools.
This effort follows other debtor-friendly reforms. Earlier this year, the FSC cut the public disclosure period for personal bankruptcy from five years to one, enabling faster reentry into the financial system. The government also plans to implement a “bad bank” program to buy and write off long-term delinquent loans of under ₩50 million held for more than seven years.
On July 17, the FSC will hold its first roundtable with the Korea Federation of Micro Enterprise to collect direct feedback and discuss policy directions, reflecting President Lee’s public call for “deliberative policymaking” involving real-life stakeholders.
M. H. Lee (mhlee@koreabizwire.com)
