'Generous' debit cards vanishing as issuers slash lineups, bet on travel products

Debit cards once celebrated for generous discounts and rewards are disappearing fast.

Card companies, unable to count on annual fee revenue and squeezed by low merchant commission rates, are prioritizing the discontinuation of existing products over developing new ones.

Instead, they are concentrating benefits on products with clear marketing appeal and customer-acquisition potential — travel cards targeting the overseas travel boom being the prime example. The debit card market is shifting away from general-purpose products toward niche offerings aimed at specific customer segments.

According to the Credit Finance Association, 22 new debit card products were launched in the first half of this year while 30 were discontinued, for a net reduction of eight. Over the same period, 73 new credit card products were introduced and 97 were discontinued, a net loss of 24. Combined, the industry shed a net 32 credit and debit card products in the first half alone.

A year-by-year breakdown shows the industry's "product diet" is no passing trend. After a net reduction of 283 credit and debit card products in 2023, another 333 disappeared in 2024 and 313 more in 2025 — three consecutive years of decline.

Including the first half of this year, the cumulative net reduction reaches 961 products. The pace of cuts has slowed somewhat this year, however, as large-scale product consolidation has already been carried out over the past several years.

"Because major adjustments had already eliminated a large number of cards between 2023 and 2025, the volume of discontinuations in the first half of this year was relatively modest," a Credit Finance Association official said.

Particularly striking is the chronic contraction of the debit card market. Credit card lineups fluctuate intermittently — new launches pick up or discontinuations slow depending on industry conditions — but debit cards have recorded a net loss every single half-year period without exception from the first half of 2023 through the first half of this year: six consecutive periods of decline.

Signs that card companies are in effect withdrawing from the debit card market are also visible in new launch figures. Over the past five and a half years, credit card issuers have released at least 50 new products per half-year period and as many as 130 or more, while debit card launches have averaged only about 17 per half-year period.

The contraction accelerated from the first half of 2024, when issuers discontinued a record 87 debit card products in a single half-year period. Squeezed to the limit by pressure to lower merchant commission rates and rising funding costs from high interest rates, companies moved first to cut debit cards — the least profitable segment. Many well-regarded debit cards that had spread by word of mouth among consumers vanished around that time.

Shinhan Card discontinued several products in June, including the "Areumdaun Card," "Welfare Big Plus," "MY KBO," "National Busan Mechanical High School Alumni S-Choice" and "Korean Vietnam War Veterans Association S-Line" debit cards.

Card companies are not pulling back from all debit card services indiscriminately, however. While aggressively retiring general-purpose debit cards, they are doubling down on select strategic products — particularly travel cards that can deliver clear marketing returns by targeting the surge in overseas travel demand.

KB Kookmin Card, for instance, revised the terms of its KB Kookmin Travelers debit card on Tuesday to add a 10 percent discount at overseas merchants. The card's foreign currency account was also expanded from supporting only the US dollar to as many as 11 currencies. The eligible age was lowered from 14 to 7 as well, a move aimed at getting ahead of the so-called Alpha Generation — including elementary school students — as potential future customers.

"Because debit cards carry no annual fee and face low commission rates, they structurally lose money the more they are used, making them the first target for cost cuts," a card industry official said. "Going forward, the market will continue to shrink for ordinary debit cards and reorganize around specialized products — like travel cards — that can target a clearly defined customer base."