Credit and Finance Around the World – 10 Things You May Not Know
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.
Credit Card Facts – Top 10!!
They sit in your wallet, but, how much do you know about them? Credit cards are a huge part of most people’s everyday life, but, they’re a relatively recent phenomenon. A bit more about the history of this influential financial device:
Store cards predate regular credit cards by as much as 50 years. Issued in the early 1900s, the first cards could be used only in the store where they were issued. They were offered as a convenience to build customer loyalty.
The first card that is similar to the Visa and MasterCards in your wallet today was the Charg-It. This was offered in 1946 by a Brooklyn banker named John Biggins. Merchants in New York would forward customers’ bills to the bank and Biggins would pay them and deduct the amount from clients’ bank balances.
The Diners Club card was established in 1949 after a businessman named Frank MacNamara was embarrassed by the discovery that he’d left his wallet home while out on a business dinner. Deciding that there had to be a more elegant option than cash, he set out to create the card, which was soon accepted at restaurants and hotels. By 1951, there were more than 20,000 people with Diners Club accounts.
American Express got into the card game in 1959 with a purple charge card. Before jumping into charge cards, American Express had offered their famous travelers checks and acted as a competitor to the US Postal System.
The first credit cards that resemble the revolving cards we have now were introduced in 1966. The first card was established by Bank of America and called the BankAmericard. Later on, it became the modern Visa card.
MasterCard followed Visa quickly. Originally known as MasterCharge, it was created by a federation of banks working together to provide nationwide credit card coverage.
Even though American Express got into charge cards early, it was awhile before the organization started offering revolving cards. Original American Express cards needed to be paid in full at the end of each month. In 1987, they began offering a revolving card that could carry a balance from month to month.
51% of Americans have two or more credit cards. On average, they carry a little less than $9,000 in credit card debt.
1 in 10 have 10 cards or more. That’s higher than the portion of Americans that hold Masters degrees (8%) and roughly equal to the number of people who are left-handed.
A credit card is a credit card, right? Not so! The familiar magnetic strip in American cards is no longer the chosen standard overseas. In Europe, there’s been a migration toward EMV cards which feature a microchip instead of the magnetic strip. There are about 20 card issuers in the US that offer cards with the chips; they’re not a standard feature, but one offered to customers who travel overseas a lot.
No matter what is in your wallet, manage your debt well. Used right, credit cards can be a handy and convenient tool for travel, nights out and day to day life.
For more information regarding how credit cards work you can request a free consultation below.
Improve Your Credit Score – 10 Surprising Ways
We all know how important credit scores are, yet it’s easy to forget about them in day-to-day living until you need that car loan or mortgage, only to find that your score isn’t want it should be. While credit repair companies can help, there are a few surprising tricks you can do to fix credit scores now. As you rebuild credit, consider these surprising steps.
1. Pay Down Cards Strategically
Paying down debt is good, but paying it down strategically will bring the best gains. Pay down debt in such a way that your debts are about 33 percent of the limit on each debt.
2. Stagger Payoffs
Making several small payments throughout the month will lower your debt more quickly and also improve your credit score rapidly, because doing so improves your credit utilization ratio, which is 30 percent of your score.
3. Ask for a Limit Increase
Do you have a card or credit line in good standing? Asking for an increase could actually improve your score, because it will improve that credit utilization ratio. Just don’t call if your account is not on solid ground. Your bank might answer by lowering your limit.
4. Ditch the Scissors
If you want to rebuild credit you should cut up your credit cards, right? Wrong! Cutting up cards might keep you from adding huge balances, but realistically your credit history needs to show some active cards. Step away from the scissors! Instead, use the card, but pay it off each month.
5. Dispute Errors
That little error on your credit report might not seem like a big deal, but it could be more damaging than you think. Don’t let it sit there. Dispute it. If you’re successful, you’ll see your scores jump up quickly.
6. Go After Missing Accounts
What do your cable provider, wireless provider, telephone company and utility company all have in common? They can impact your credit score, but only if they report. All it takes is a call to ask if they will report your account. Provided it’s in good standing, it will raise your FICO score.
7. Pay Before the Report Date
Paying before the due date is good, right? Wrong! If you want to make your credit score jump, try to pay before the report date. Find out when the credit card company reports your balance to the credit reporting agency, and make a payment before that date. Doing so will make the charge look as though it never existed.
8. Get a Blend of Credit
Adding more credit won’t repair credit problems, will it? It will if you are adding a different type of credit. Lenders want to see a variety of credit types. Add an installment loan to your credit cards to give your score a boost.
9. Keep Cards Open
Paying off a credit card feels like such a relief, your first inclination is going to be to call that company with great gusto and demand that they cancel your account. While that might feel rewarding, it’s a mistake. Closing a bunch of cards will actually deal a blow to your credit score.
10. Open a New Card
Yep, opening a new card will actually help your credit. Now, this doesn’t mean opening a new card and filling it up right away. Instead, open a new card that has favorable terms and use it responsibly. Doing so will increase that debt-to-available credit ratio, which will boost your score. Keep in mind that credit scores do go down for four to eight weeks after opening a new card, but after that you should see a bump.
For More Information on how to Improve your FICO Score fill in the form below or call our office at 617-265-7900