A service that lets consumers cancel unused credit cards in one place has drawn little use since financial regulators introduced it, data showed.
A total of 24,735 dormant cards were canceled through Accountinfo, the integrated account information service, between the feature's launch on Sept. 26, 2024, and the end of August this year, according to data the Financial Supervisory Service provided to the office of Rep. Park Sang-hyuk of the Democratic Party of Korea on the 20th. The figures were 4,344 in 2024, 12,079 last year and 8,312 from January through August this year. They exclude cancellations made through card companies' apps, websites and call centers.
A dormant card is a credit card that has not been used for at least a year since its last transaction. Regulators added the integrated cancellation function to Accountinfo two years ago so that consumers could clear out dormant cards scattered across multiple issuers. Previously, cardholders could look up dormant cards but had to apply separately to each issuer to cancel them or resume use.
Cancellations have remained minimal since the service launched. Cumulative dormant-card lookups reached 948,713 by the end of August this year, but cancellations amounted to just 2.6% of that total. Requests to continue using a card numbered 7,410. Monthly cancellations were little changed, averaging about 1,007 last year and about 1,039 from January through August this year.
Dormant cards have continued to pile up while use of the integrated service lagged. The eight specialized card companies held 17.671 million dormant cards at the end of June, according to the Credit Finance Association. That is up 2.313 million, or 15.1%, from the end of September 2024, when the integrated cancellation service was introduced, and 428,000 more than at the end of last year.
An issue raised in the industry is that personal data remains on file for dormant cards as long as the contract stays in force. The Credit Information Use and Protection Act in principle requires personal credit information to be deleted within five years of the date a transaction ends. Essential information retained after a transaction ends must also be managed separately from data on active customers. Dormant cards, however, keep their contracts in force even when unused for long periods, so the deletion and separate-storage standards premised on a terminated transaction do not apply.
Critics say separate storage standards should be established for the data of long-dormant members. Notices informing customers that a card has become dormant should also specify which personal data items are held and how long they will be kept, so consumers can decide whether to keep the card, they say. "It is a problem that personal data is kept for long periods simply because the contract remains in force even when a card goes unused," Park said. "The point at which a transaction is deemed to have ended and the standards for deleting personal data need to be reexamined, and the system should be improved so that no blind spots remain in personal data protection."