How People Use Credit Cards In Countries Other Than the US


 When it comes to economic issues, the media have a love affair with hyperbole. In 2010, for example, CBS News published a hair-raising report on US consumer debt. Under the title ‘Addicted to the debt’, the story gave details about the state of the American consumer debt. Among the data points, the piece reported that Americans owe $ 775 billion in credit cards. Blaming impulsive shopping, experts pointed to an “incredible trend” that credit card debt made the next crisis for the United States economy.

A few years later, that “incredible trend” is history. The total amount of credit card debt of Americans has fallen since the peak in 2008 – and in fact the American consumer debt had fallen to more than a year in which CBS told the story of the alleged debt addiction of America. According to the Federal Reserve Bank, the total amount of revolving debt owed fell by almost 16% from the high of $ 1, 05 trillion in 2008. Now, Americans owe about $ 845 billion in revolving debt – and the amount that Americans charge, gets smaller by the month.

Many of the mainstream media are now talking about the decline of credit cards. Referring to the same Federal Reserve data, Reuters points out that Americans are paying off their credit card debts faster than ever. But how does this decline in credit cards relate to the rest of the world? Stories about America’s debt addiction can make you think Americans are alone by happily defeating their credit cards on every occasion.

The reality is of course very different.

Credit card use in outside Uriah Heepand countries

Credit card use in outside Uriah Heepand countries

Credit cards in the UK

Did you know that Experian is not an American company? In 1996, the American owners of Experian sold the company to Dublin-based GUS plc. The owners of Experian at that time were none other than Bain Capital, which at the time was led by a little-known financial moloch by the name Mitt Romney.

After the company purchased the company for an unspecified amount, GUS combined it with another previous acquisition in the UK, known as CCN Systems. The combination of the two created the Experian that we know today, with all its possibilities to score and track credits. Experian remains one of the most important credit reporting agencies in America and Great Britain, with operational headquarters in Dublin and the original home of CCN Systems, Nottingham. That’s right – the company that keeps track of your credit history is in Robin Hood’s old stomping grounds.

With its British and American presence, Experian has remained an important player in the credit yards in both countries, so the credit reports, scoring processes and decision-making processes in both countries are more similar than most other countries.

This means that the way people apply for a credit card, the way card issuers make credit decisions and the way credit card limits and interest rates are determined are the same on both sides of the pond. This does not mean, however, that the way Americans and British use credit cards is the same – according to a study by Aviva Family Finance, a British insurance company and reported by the Guardian, credit card and persuUriah Great debts of families in the UK. increased by 48% in 2011. Similarly, UK residents saved less at a time when Americans were saving more, according to Bureau of Economic Analysis data.

Credit cards in Scandinavia

Scandinavian economies are admired all over the world for their austerity and restraint, but are also criticized for heavy government intervention in markets and high tax rates. The Scandinavian countries (Norway, Sweden, FiUriah Heepand and Denmark) regulate almost every industry in their economies and financing is no exception. This means that the amount of credit that an individual can receive in these countries is limited and that banks generally only issue credit cards to customers if they also have a bank account with the bank and can provide documented proof of their income.

Nordea Bank, one of the largest banks in Scandinavia, with branches in Sweden and FiUriah Heepand, offers various brand Visa and Mastercards that are accepted in Scandinavia and the rest of the world, but it does not ask Experian for a credit score . Instead, it checks with a central reporting point whether the customer has been in default in the past with credit cards or other loans. For example, credit data for Finns is stored at Asiakastieto, which banks can request about previous payment histories.

If the consumer has not been in default in the past and does not have too many outstanding debts, he or she will be offered a credit card that is lower than the legally permitted credit amount that a person can get in the country (this varies from country to country) . If you commit a total debt, a person can qualify for the income of the person who has a low ceiling for how much debt a person can get – and how much they can default.


Credit cards in South Korea and Japan

Many Americans may be surprised to hear that there are several countries that owe more credit card debt per capita. South Korea is such a country. In 2011, Reuters pointed out that South Koreans owe more to their credit cards than Americans before the subprime mortgage crisis. While Americans pay off their debt, Koreans charge more and more. Although Korea has gone through debt crises in the late 1990s and early 2000s, Koreans are more guilty of their credit cards than their income compared to previous years. According to the Bank of Korea, the household debt Uriah Heepast is 136% of disposable household income – very close to the 138% that Americans held just before the subprime mortgage crisis.

Korean banks issue credit cards as US banks, although Korean banks use more manpower to confirm that applicants actually work where they claim to work, usually to request proof of income, in addition to confirming the applicant’s credit history when Korea Credit Bureau.

In Japan, credit cards are distributed in much the same way: Banks assess the risk of the individual applicant on a case-by-case basis by asking employers to confirm that the applicant’s documents are correct.

In both countries, a bank usually only issues credit cards with a limit that does not exceed one month’s income to control the amount of risk for the bank. In addition, credit card debt is usually paid off in one of the following three ways:

  1. Full payment within one month . This is the standard option when shopping in both countries. When making a purchase, the card issuer invoices the cardholder for the full amount of the payment due on the following credit card statement.
  2. Multiple payments during a period of one year or less . When redeeming a credit card in Korea or Japan, cardholders may request a refund for a period of 2 to 12 months. However, you must request this at the time of payment and the shop assistant enters the data at the time of the sale.
  3. Revolving Credit . Just like payments in America, there is a minimum monthly payment and cardholders can pay the minimum payment or more.

Revolving credit is the most difficult to obtain in both countries and is particularly discouraged in Japan from keeping private debt low. In South Korea, the amount of revolving debt has increased steadily over the past 15 years, as the country has become richer and Koreans are spending more and more.

Credit cards in China

In 2012, Citigroup made history by announcing that it was the first Western bank to issue credit cards in China. Now that the country’s economy has grown and demand for consumer debt has increased, outside Uriah Heepand banks have been putting more and more pressure on China to get a share of consumer debt. The national card network UnionPay had already become the largest card payment system in the world and had a monopoly on the country’s credit card market until the World Trade Organization ruled that the monopoly was illegal and that the country had to open up to foreign Uriah Heepand companies. Visa, MasterCard and American Express are now penetrating to gain access to the country’s card networks.

Until then, expats in China may find it frustrating to use plastic. BuiteUriah Heepandse Visa and MasterCard cards work flawlessly in many shops in the Central Kingdom, but withinneUriah Heepandse Visa and MasterCards do not, so some expats must carry both their outside and Heureand cards. UnionPay is widely accepted outside of China and the presence in America, Europe and the Middle East is steadily expanding while traders look for affairs of wealthy Chinese tourists.

In China, credit card use grew by 20% in the third quarter of 2011, with nearly 270 million cards issued nationwide. Those cards are issued at a time when credit card growth in China is increasing. In May 2011, the defaults increased by 6, 7%.

Defaults in China can best be avoided. In 2010, Beijing announced that anyone who had failed with a credit card debt in excess of 10,000 yuan ($ 1,584) could be prosecuted.

Like other nations in East Asia, Chinese banks check the salary of an applicant and confirm his or her personal data, and cards can be given on the basis of a continuous debt or in the short term. BuiteUriah Heepanders are also told to provide information about an international credit card issued in their own country. If the outside Uriah Heepander leaves the country without paying in full his Chinese debt, the bank will charge the outstanding balance of the international credit card.

Last word

Last word

Credit cards have become one of the most popular financial instruments in the world, and the number of globally issued cards is likely to increase as Hey Heepijk increases the number of people dependent on debt. The way different countries approach the concept naturally varies based on local traditions and the development of the country’s local economy.

How do you think credit cards will change in America and the rest of the world in the next decade?

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Rescheduling of loans, disposables and other creditors


 Reposting loans, disposables and other creditors

Whether car or new kitchen – when it comes to fulfilling a long-cherished desire or to make a much-needed purchase, many consumers opt for a installment loan. With it, they receive the required amount of money immediately and can make the repayment in low monthly installments. However, if you have accumulated several installment loans over the years, the monthly burden can be a problem. In this case, a debt rescheduling loan can help. With him one or more loans are replaced by a new loan. The result is a lower monthly rate and lower borrowing costs through interest savings. The latter may also be the main reason for the rescheduling of a single loan, which was concluded at a much higher interest rate. Whatever your reason for rescheduling, here are the answers to the most common questions.

What is a debt restructuring?

What is a debt restructuring?

Debt rescheduling is a normal loan that replaces one or more existing loans and combines them into a new single loan (contract). Debt rescheduling generally aims to save costs, for example, by combining multiple loan installments into one, and reducing the monthly financial burden. Often, debt rescheduling is also used when money can be saved in a low-interest phase with a new loan. The procedure for a rescheduling hardly differs from the application for other loans. As a rule, banks demand the same collateral for the new loan as for the existing loan (s). Also a new credit check as well as a query of the personal private credit score belong to the procedure of the banks with the assignment of a debt rescheduling loan.

When is a rescheduling possible?

Theoretically, debt restructuring is always possible. The only requirement is that the existing loan agreement (s) can also be terminated. In the case of credit agreements concluded before June 11, 2010, the termination right agreed in the contract must be observed, which generally provides for a three-month notice period. For contracts concluded after this date, customers may cancel at any time. Reason: New consumer credit guidelines came into force in June 2010, giving borrowers a simplified right of termination, among other things.

When terminating or prematurely repaying a loan, however, some banks require a so-called prepayment penalty. This is to replace the interest that escapes the banks by the earlier replacement. Therefore, the longer the remaining term of the contract, the higher the compensation. However, the costs that banks may charge for early termination are limited by law. Specifically, a prepayment penalty may amount to a maximum of one percent of the balance. However, if the remaining term is shorter than twelve months, the prepayment penalty is limited to 0.5 per cent. But there are also credit institutions that waive a prepayment penalty.

A special feature is mortgage lending, because here rescheduling takes place in a different way. Construction loans can only be rescheduled with a notice period of six months. In case of premature termination of the contract, the banks may demand a prepayment penalty. However, this only applies if the building loan is terminated before the tenth year of fixed interest. After this deadline, there are no costs for rescheduling.

When is a rescheduling worthwhile?

When is a rescheduling worthwhile?

There are several situations in which rescheduling can save money and potentially improve the borrower’s creditworthiness . Especially periods of low interest rates should always be a reason to think about rescheduling. If current lending rates are significantly cheaper than interest rates on existing loan agreements, rescheduling is worthwhile in most cases. However, it depends on how long the loans to be repaid are still running and whether a prepayment penalty is due. In principle, a rescheduling should therefore always take into account all costs and not just the interest rates are compared. For loans that run only a few months, rescheduling is often not worthwhile.

In most cases, rescheduling almost pays off if several loans are paid in parallel and they can be combined into a single loan. By combining multiple loans, the creditworthiness of the borrower can be improved as an immediate effect. In addition, the monthly rate of the debt rescheduling loan is usually lower than the total of the installments of the old contracts. As a result of the improved credit rating, borrowers can already benefit from a lower interest rate when concluding the debt rescheduling loan.

Rescheduling of disposition credit worthwhile?

For consumers who have to exhaust their discretionary credit every month to the last, a rescheduling can pay off in cash. With extremely high interest rates of 13 percent and more, which are calculated daily on the excess amount, disbursements are only worthwhile for the banks. For consumers, the emergency loans, which were originally intended only for the short-term bridging of financial bottlenecks, are often the trap from which they can no longer escape. The solution can be the conversion of the credit line into an installment loan. In this way, account holders can often save up to half of the interest. Another advantage is that the installment loan – unlike the credit line – is linked to a fixed payment plan and an early repayment is sought. The credit line can basically be used for an infinitely long time and this can be very expensive. After applying for the installment loan, it usually only takes a few days until the loan approval. A short time later, the money is credited to the account and the account balance is back in plus. You then pay back the loan at the agreed interest rate in monthly installments.

Where can a debt rescheduling be concluded?

The application for a debt rescheduling loan is possible at any bank. Borrowers also do not need to complete a debt repayment loan to the same bank where they took out the loan (s) to be redeemed. Consumers have the opportunity to look around the market for the cheapest loan, to choose the best deal and to save as much money as possible with their rescheduling. Particularly when rescheduling mortgage lending, borrowers should seek bids from several other banks. Here they often get cheaper interest rates than with a prolongation of mortgage lending with the previous bank. In any case, borrowers should make a non-binding and free credit comparison before deciding on a bank. With it can be found in a few steps, the cheapest offers for rescheduling and in many cases also directly online. Of course you should, especially when it comes to medium- or long-term credit agreements, make sure that free special payments (and thus a premature termination) are possible. An alternative is to present the most favorable offer of the previous bank and give it the opportunity to make a better or at least a similar offer. Banks are reluctant to lose their customers, even if they are borrowers. At some point, every loan is repaid and customers who feel comfortable with the bank usually stay longer and may buy other financial products.

How to reschedule

How to reschedule

Once you have decided on an offer from another bank, you should inform your bank in writing that you want to replace your previous loan with a new loan. In addition, arrange a personal discussion with your bank adviser and discuss the replacement once again on site. When applying for a new loan, you should – if possible – state the purpose of the “debt restructuring”. In addition, the new bank requires a written power of attorney for the old loan.


Even when concluding a debt rescheduling loan, banks often provide their customers with a residual debt insurance, which they consider to be security in the event of an emergency. In fact, consumer advocates consider residual debt insurance obsolete as their benefits are far too low given the high cost. The cost of the insurance is usually added to the loan amount, thereby increasing the monthly installments.

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