Credit and Finance Around the World – 10 Things You May Not Know
The way that credit and finances are handled in other countries can be strikingly different from how it’s handled here in the US. Read on for 10 surprising facts about money and credit in other parts of the world:
- If you go to Europe, your favorite credit card may not work. In Norway, you need to enter a PIN for all credit card transactions. In other parts of Europe, cards are now implanted with EMV chips for security.
- Throughout the continent of Africa, merchants and ATM owners are held financially responsible for fraud. (In the US, the card issuer is the one that’s left, legally, holding the bag.) As a result, 77% of credit card systems on that continent require the extra security of EMV chips.
- In Kenya and Tansania, most minor financing transactions don’t go through a bank. They are handled with a mobile system called M-Pesa that is run by the countries’ two largest mobile phone carriers.
- Chances are that Americans lag people from other countries in financial literacy. The Organization for Economic Cooperation and Development has begun testing 15-year-olds to find out how much, on average, kids from each country know. The results of the financial literacy test won’t be out till later this year; however, US scores are currently below average in math, which tends to correlate with scores in financial literacy.
- In Scotland, Northern Ireland and Wales, math teachers are required to have units on financial literacy in their classes. England and Australia will be adding this requirement to their curriculum as well starting with the 2014 school year.
- A new US company, COIN, is recruiting customers for the launch of a digital credit card wallet. The new system will be a substitute for the eight or more cards most Americans carry every day.
- In Canada and Australia, the average consumer charges over $7,000 on credit cards every year. That’s almost double the average American’s charges of around $4,000. Canada has over 72 million credit cards in circulation, compared to 686 million in the US.
- Countries where people use credit cards less tend to have higher savings rates. In Germany and France, the average consumer charges just a few hundred dollars a year. The average savings rate in both countries is over 10% of income per year.
- About half of all Americans carry a balance on their credit cards. By contrast, over three-quarters of South Koreans pay off their balance in full every month.
- In many countries where credit card usage is low, even large transactions are handled in cash. For instance, expenses associated with a wedding in Turkey or Bahrain would be paid in cash, despite being thousands of dollars.