Different cultures handle their credit cards in different ways and not all countries treat the plastic currency the way it is treated in the US. At least 73% of the American households own a credit card, and one would like to believe that using a credit card on a daily basis is a way of life. However, as credit card habits vary widely across the globe we need to take a closer look and learn lessons by observing how people in different cultures handle money.
The way people use credit has to do with their culture, states Susan Hirshman, President, SHE Ltd, a consulting firm based in New York, which works to educate women with the financial aspect. According to Hirshman the money that people spend is associated with the society they live in. For instance, if people assume that having five cars is normal then they will ensure that they will have five cars. It is the same with credit. Previously, credit was not so popular as it is in today`s society. In the United States it has become very fashionable as the number of credit card charges have increased from approximately $69 billion per year in the 80`s to more than $1.8 trillion in 2006. Some of the debts could be attributed to unemployment, medical costs, etc; but most of the small purchases were mostly non-essential goods and services.
In countries such as China, credit cards were used to buy items such as electronic goods and in Australia more than half the population used their credit cards to pay for utility bills.
Online shopping habits also reveal a lot and in the US credit cards are the most widely used tools. Whereas, the French and the British prefer the usage of debit cards, the Germans primarily relied on the online transfers from banks and PayPal according to the research conducted.
On an average the American makes around $4,236 per year in credit card transactions. Canadians and Australians spend more and make $7,406 and $7,889 in card transactions. French citizens however, make $267 on annual credit card charges while Germans charge just $158 per year.
Just using the card is not such a bad thing, it all depends on how one pays back on the card and that is the most critical. It has been noted that cultures that spent less on credit cards has a higher savings than the cultures where they spent more.