Increasing debit card’s daily payment limit expected to reduce household debt

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Debit cards are becoming more and more popular nowadays especially to young generations who are willing to keep their budget under control. Using debit card helps people to spend their money more rationally because they cannot use it beyond their bank account balance. Moreover, they can better manage their budget because the amount paid using debit card is immediately being withdrawn from the linked bank account.

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However, there are also disadvantages to such practical and economical debit card. One of them is the fact that maximum daily payments using debit cards is limited to 2 to 3 million won. Credit cards come in more handy than debit cards when purchasing expensive goods such as electronics and furniture. Or else, you would have to withdraw money directly from bank accounts to buy things that cost more than 3 million won.

Being fully aware of such inconveniences and to encourage people to use debit cards more often than credit cards, the FSC yesterday announced measures to increase the maximum daily payment limit up to 6 million won from October. Moreover, debit card companies will be required to return canceled payments to users on the following day. Currently, it takes about a week to get your money returned after cancelling payments.

Such measures are expected to increase the usage of debit cards which will ultimately contribute in lowering household debt by encouraging more rational spending.

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