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Do People Use Credit Cards Differently in Other Countries Than in the United States?


More than five years ago, CBS News aired an expose on how Americans use their credit. The feature was called “Addicted to Debt” and claimed the total debt owed by the entire population in the United States totaled $775 billion for credit cards alone. The show concluded Americans were so enamored with using credit cards, it would be the nation’s next fiscal disaster.

This news brief could not have been more off base as over that period of time, Americans have shifted away from using credit cards and that total figure is now cut in half with declines in that number every thirty days. Media presentations like this leave the impression that Americans are the only nation balancing on the edge of a cliff due to their addiction to credit cards. Are they alone in using plastic? Definitely not.

People in the UK Also Use Credit Cards

Contrary to popular belief, Experian has not been a U.S. Company for nearly a decade. After several years of transition and corporate mergers, the company’s base was established in Nottingham and an operational center in Dublin. Therefore, the American and UK credit systems are quite similar,much more so than any other two nations, but how they use credit does vary. For instance, people in the UK use credit cards much more than Americans as there has been in increase in that nation’s personal debt since 2011. Also, their personal savings accounts were substantially less than U.S. citizens. It appears the population in the UK is much more likely to use credit than individuals in the United States.

How Scandinavians Use Credit

Heralded around the globe for their stringent, down-to-earth measures, Scandinavian economies are also prey to extensive government control. This also applies to credit. A general citizen is usually only approved for a small credit line and credit cards issued through banks must have established evidence of how much a person’s salary is. In addition, they only have one central credit agency that reports on payment histories. With this in mind, Scandinavians do not employ credit very often and do so sparingly.

The Approach to Credit Cards in Japan and South Korea

Although America has been touted as the nation with the highest level of credit card debt, South Korea actually ranks above them. Four years ago, Reuters discussed how South Koreans have amassed higher balances on their credit cards then Americans did prior to the recession of 2008. As Americans are currently decreasing their debt, the South Koreans are following the opposite path and their debt is now at the same threshold the United States had before the economic downtown.

Japan has similar requirements to Korea for obtaining a credit card. Like in the U.S., both countries issue credit cards through banks, but they are much more regimented in confirming a consumer’s place of employment and proof of income. They also normally offer cards with a credit limit that matches one month’s income so a person is not in danger of overspending. Also, the balance is supposed to be paid in full at the end of the billing cycle, but if a consumer would like to extend payments they can do so for two to 12 months, but they have to make that request at the time of the transaction.

Revolving credit, where a person can carry a balance for an unspecified term, is allowed in both nations, but is very difficult to procure. Especially in Japan, where debt is frowned upon. In South Korea this type of credit has been steadily advancing for the last decade and a half. Both of these countries use credit much differently than in the United States.

The Whole World Does Use Credit 

Although the use of credit cards spans the globe, each nation institutes them into their economy and lifestyle differently depending on their culture as well as their economic structure. It is only normal this should be the case and no matter what the media attempts to project, Americans are not the only nation that frequently incorporates plastic for their purchases.

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