Tuesday, October 31, 2006

It's not my (de)fault.

I came to Korea in 1996, a little more than a year before the bursting of the Korean economic bubble that is often inaccurately referred to as "the IMF crisis." Back then it was virtually impossible for a foreigner to get a credit card in Korea. In 1998, I started working for a local college and I managed to convince the people at Korea Exchange Bank to give me a shot. I was planning to get married and finding out the hard way that a credit card would be necessary since my savings was practically nil. I tried to fill out an application at the local branch of KEB but the people there told me that it would be impossible to issue me a credit card without a cosigner because I am a foreigner. I wrote a nice but firm letter explaining my thoughts on racial discrimination and mentioning the fact that KEB had branches in foreign countries as well as many foreign investors. A Mr. Gahng called me a couple of days later (a few eons before I expected to be called) and asked me a few questions before he told me to go to the local branch and speak to the manager. I did so and soon after received my first credit card in Korea; without a cosigner.
This was not the first time I had dealt with this cultural idiosyncrasy of saying things are 'impossible' when they are merely complicated or inconvenient for one of the parties. And it was not my last time to use similar arguments to convince creditors to give me a shot. While KEB has been, by far, the most helpful for my credit needs, other financial institutions have extended me credit in the past as well as recently. But on EVERY single occasion, I have met with resistance and the "you're a foreigner" argument. And even though I have religiously and completely paid off all of my creditors in Korea, I still find it difficult to understand why certain types of credit are unavailable to foreigners who hold stable positions in Korea and/or are married to Koreans. Even at my trusty KEB, I was told that a housing loan would be difficult and would require me to pay a ridiculous percentage rate (comparatively speaking) if I wanted the loan in my name. I eventually had to get the loan in my wife's name in order to buy an apartment.
The argument that is most often used against credit for foreigners is our 'transience.' It is automatically (and incorrectly) assumed that any foreigner who lives here will leave here. It is further assumed that when a foreigner leaves Korea, debts will be left unpaid without possibility of collection or punishment. So are we considered a 'bad credit risk?" Based on what statistics? If you don't give credit to foreigners as freely as you give it to Koreans, it is a little difficult to say that we won't pay up when the time comes.

Now comes this little gem from the Korea Times today, there are more than 2.9 million credit defaulters which apparently equates to almost 1 in 8 "economically active" people in default. It would be really interesting to see statistics on the credit that is so parsimoniously doled out to foreigners like myself alongside the statistics of default among the same just for comparisons sake.

Just for those of you out there who might be interested in obtaining a credit card or other loan try KEB first, they have the best track record with foreigners (they even have a card that is just for foreigners).

Korean banking industry is coming around...albiet slowly, but times they are a changing, the best thing I can tell you is to be persistent and patient but above all be polite. It works wonders.


whitey said...

I'm a foreigner and got my KEB card a few months. I'm happy with it. Their service is professional, I get an online statement, it's very convenient, and there have been no hitches.

A pleasant surprise, considering another bank treated me like I had the plague when I entered a branch and asked to apply for a card. It was humiliating.

fencerider said...

thanks for stoppin by whitey...are you the "through whitey's eyes" whitey?