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South Korea is recognized as one of the most credit welcoming societies today and there is nothing so surprising about the fact, considering the rate of the technology awareness and the dense population of the country. Surprising is the basic reason why South Korea introduced credit cards as the major payment tool.

In the late 1990s South Korea initiated a campaign aimed at fighting the corruption that was going beyond all limits. The uncontrollable flow of cash in the underground economy made it extremely difficult for the government to track it, so a plastic card and electronic transactions prompted a way out.

Apart from the national South Korean banks, there have appeared a great number of foreign financial companies that keep up and stimulate further development of the credit card industry in the country. Among them are such banking powerhouses as Citigroup and Chase.

Credit cards have flooded big businesses, small retailers as well as the purses of Koreans. Back in 2006, it was estimated that $491 billion in private consumption was effected with credit cards and no country's credit card industry can yet show the same ratio.

As reported by the Bank of Korea in the same year, the country held the fifth place in credit card spending among other developed countries, and about every economically active Korean consumer carries an average of four credit and other plastic cards in the wallet.

Just like in the USA, where the number of credit card application offers is growing with every year, in South Korea the flow of credit card offers is never likely to subside. So the competition among credit issuers is never more on the rise today.

It is all about the tough competition for more loyal customers that drives the fast development of credit industry, keeping issuers in a constant search of new incentives for getting a plastic.

How, do you think a Korean credit card provider cope with a task of making you use their credit card more and more? They have invented a smart trick. Let's take Hyundai Card, issued by the joint Hyundai Motor of Korea and General Electric company of the USA, as an example. Hyundai Card lends you money to purchase a new car and then allows you to repay the loan in as soon as three years with the help of the cash back reward program.

Every customer would want to be done with a car loan, so the possibility of doing away with it with the cash back bonus will keep a customer using the card till the end. The idea of switching over to another issuer will never occur to a cardholder. Smart, isn't it?

Suchlike policy extends onto other card companies such as Samsung and Shinhan, which encourage credit card use to purchase electronics or furniture.

Cash back has become an effective way or saving a buyer's money and an essential tool for banks to attract more customers. The thing Korean customers like most of all is that they can use the cash back at their own wish - either make purchases with it or have it deposited to their personal bank account.

Though being most popular, cash back bonus is only one of the many other incentives. Citibank miles rewards redeemable for a free round-trip ticket, generous discount programs available at almost all small retailers and department stores and gas rebates make the competition for customers strong and healthy.

We won't speak about a certain number of suicide cases in 2003 that happened due to enormous credit card debts and insolvency of many Korean customers, as the present day government is really trying to take credit card use under control.

For the time being, however, there are still so many cards with different incentives in the wallet of an average Korean, that one has to stop to think which one to use at a certain retailer and what benefit he/she will have.