Is the use of credit cards a strong indicator of a nation's economy?

[Pumapipa]

As some may have observed, highly developed countries like the US encourages their people to use credit cards for transactions. Cash transactions are still used but mostly they prefer people to have their credit cards. I want to know if having a credit card really necessary even if they can afford to pay in cash? Are credit cards reflective of your ability to pay?

[1714934634]

1714934634

[1714934634]

1714934634

[1714934634]

1714934634

[timerland]

As some may have observed, highly developed countries like the US encourages their people to use credit cards for transactions. Cash transactions are still used but mostly they prefer people to have their credit cards. I want to know if having a credit card really necessary even if they can afford to pay in cash? Are credit cards reflective of your ability to pay?

I guess it does indicate where a country is in terms of technological adoption, as credit cards being popular. With more cash dominated places, you generally tend to see adoption of new technologies to a lesser degree.

But the decision to go cashless isn't really on the consumer, and there are obviously countries where economic development isn't really that high, but they are still forced into using credit cards or other cashless payment methods due to their fiat currency being dysfunctional.

It is not reflective of your ability to pay. IMHO, it could be reflective of debt since credit card is essentially loans on demand. If you look at most western countries, you'll see that the levels of credit card debt is just crazy right now. Anyhow, credit cards are really not something that's new and I think if you want an indicator of a nation's economy economy, still look at all the traditional indicators like GDP etc. depending on your needs. If you want to look at how receptive they are to new Fintech, look at their policy with crypto.

[avikz]

Your statement will make sense if you replace the word "credit card" with "plastic card", at least me! Developed countries encourage their citizens to use plastic card more often than cash. Sweden is the first country in the world who had achieved such milestone. It is an effective measure to curb black money to be mixed within the economy.

On the other hand, credit card is a banking trap. In some third world countries, credit card companies take interest as high as 48% per annum. Credit card doesn't signify the development of a country, it signifies the control of banking cartel over the country's economy.

[Baofeng]

As some may have observed, highly developed countries like the US encourages their people to use credit cards for transactions. Cash transactions are still used but mostly they prefer people to have their credit cards. I want to know if having a credit card really necessary even if they can afford to pay in cash? Are credit cards reflective of your ability to pay?

Yeah it could be a good indication how successful a nation are if people are encourage to used more of their credit card rather than bringing huge money with them. Actually, I was quite surprised when I traveled to US before and people are using their credit card and their bank cheques to pay even a small amount of money. Well in my place where I lived in, there's a lot of people also using their credit cards but I'm assuming they just used it to buy 'expensive' items. And most of the time if credit cards are used here, it raises some eyebrows specially to those behind you because it takes more time to processed it, so the lines piled up. 

[Afnan_faizah]

As some may have observed, highly developed countries like the US encourages their people to use credit cards for transactions. Cash transactions are still used but mostly they prefer people to have their credit cards. I want to know if having a credit card really necessary even if they can afford to pay in cash? Are credit cards reflective of your ability to pay?

I think that is wrong perception, of course government will encourages their people to use credit cards because their bank will get more profit. I don't think that credit card is a good thing because it still costly to make transactions using it. I prefer to use bitcoin because it's more practical to use.

[rickadone]

As some may have observed, highly developed countries like the US encourages their people to use credit cards for transactions. Cash transactions are still used but mostly they prefer people to have their credit cards. I want to know if having a credit card really necessary even if they can afford to pay in cash? Are credit cards reflective of your ability to pay?

It doesn't have any indication at all.

Some countries are so poor that they show indications of credit card use because people can't afford simple stuff and that makes the card debts going a lot higher than it suppose to and many even default on their debt which leads to a whole lot of paper work for the bank, makes it harder to give out loans and than cripples the future profits to be made easily.

After all in some first world countries, where economy is great (not that there are many left in the world like that) rich people use credit cards and have very few cash because they already have a lot of money in the bank and the banks allow them to use limitless credit cards, type that could buy a plane with if you want and that shows credit cards are good for business there.

Hence, use of credit cards is not an indicator, credit card debt repayment is the key here, if the credit card debts are all paid than its a strong indicator that people are fine, if the credit cards are defaulted more than average then it shows they are poor.

[davis196]

Credits cards are the worst type of consumer debt.Any individual with some sort of financial culture will avoide using credtis cards and getting into high interest rate debt.Unfortunately there are many stereotype that "successful" people own and use credit cards and if you wanna be "successful", you will have to get one too.
This is just pure marketing.

[eternalgloom]

I really fail to see how it could be an indication of a country's economic situation.

Use of credit cards could have a lot to do with the nation's culture in my opinion.

In some countries parents teach their children from an early ago that it's bad to pay for things with credit.
It definitely was the case at my home where I grew up, I've heard the same stories from friends and relatives.

Plus, we generally have a very easy to use banking system with debit cards, directly tied to our main bank account.
We can use it to pay for almost anything, I even think it's accepted more than credit cards.

I'm not talking about something like a Mastercard debit card, but rather a bank card issued by banks like ING, Deutsche Bank, etc.

[Caelanpelley]

In today's life, most people use credit cards. It is very convenient in life. This also contributes to the economic performance of a country. The richer the credit card, the higher the credit card used. Instead of storing a large amount of unsecured home, send it on a credit card.

[virendarnagpal]

Using credit cards in a country in indication that people are educated; aware about technology and want to use card payments instead of cash payments.
But we can not say that credit card is strong indicator of nation's economy.  If people are using debit cards it will mean that people are wealthy too and spending their own money instead of borrowed money through credit cards.

Money spent through Credit card if not paid in time will seriously affect the user economically and his goodwill will also get affected.  The user may be levied heavy penalty and interest and may be deprived to use the facility in future.  But in case of debit card usage the user is the king; no need to repay; just spending own money.

[dothebeats]

Use of cashless payment methods isn't really an indicator of a strong economy but rather educated citizens willing to go cashless for convenience and security. Oftentimes, it's just the pace of the society that makes people use credit/debit cards in every opportunity that they could, but it doesn't affect the overall economy since the proceeds of the interest would, in the end, still get to the credit card companies and not to the government per se.

[MULTIK888]

I have never considered the need to use credit cards, as this is the most unprofitable use of money. Banks try to put you on credit cards only for the sake of maximum profit. They are interested in it and why in any way would be to give it to you.
If money is needed it is better to take a consumer loan or borrow from a friend, so you are more free in your world. Using loans you wallow in public debt, and the State is profitable.

[tenebriscaelum]

The big difference in here is the how easy it is to get a credit card in different countries and I think that will stand the economic status of a certain country. For instance in most first world countries like the US it is much easier to get a credit card as long as you have a good credit standing compared to third world countries where getting one has many requirements.

[posi]

Although the reason behind bitcoin creation was to create a currency will make every man equal, make people financial free and save us all from the economic problem which was created by the government. But, with the statement made by the OP I think US government seems to now understand the bright side of cryptocurrency.
Meanwhile, cash was created for ease payment because gold are not easy to mobilzed and it cant be pay in cent. For the government to now advice the uses of credit/debit card it mean what the IMF boss said seems to be happening and every soon many countries will have their own cryptocurrency.

[supermine]

As some may have observed, highly developed countries like the US encourages their people to use credit cards for transactions. Cash transactions are still used but mostly they prefer people to have their credit cards. I want to know if having a credit card really necessary even if they can afford to pay in cash? Are credit cards reflective of your ability to pay?

Using credit card means that their country citizen is not making enough revenue to cover up their daily life expenses so it is not an indicator of strong economy.

If you meant to say about the usage of digital payment then it also not since the developing countries like India also implemented debit and credit card payments everywhere but still it is one of the poor countries in the world.

[palle11]

Credit cards helps the economy to wade off certain challenges like theft of physical cash being stashed away and attacks. It also gets financial transactions to be easily done, saving the individual time which could be channelled towards other resourceful ventures that will certainly contribute to the country's gdp.

[TrumpD]

Credit cards helps the economy to wade off certain challenges like theft of physical cash being stashed away and attacks. It also gets financial transactions to be easily done, saving the individual time which could be channelled towards other resourceful ventures that will certainly contribute to the country's gdp.

Other types of plastic cards that are not necessarily credit cards, help tackle the challenges you listed without charging exorbitant interests rates to the detriment of the user. A countries ability to offer massive credit to its citizen indicates a healthy economy, however, I wouldn't subscribe to them because of the interest. It is better to get a debit card that charges only standard fees, and you can preserve your credit score for when and if you really need a loan/credit.

[Hydrogen]

As some may have observed, highly developed countries like the US encourages their people to use credit cards for transactions. Cash transactions are still used but mostly they prefer people to have their credit cards. I want to know if having a credit card really necessary even if they can afford to pay in cash? Are credit cards reflective of your ability to pay?

There isn't a good method of charging interest on lump sum cash payments. Credit cards introduce APR's (annual percentage rates) as a means of charging interest on top of existing transactions with late payments. Thus credit cards are more greatly incentivized due to them offering greater profit potential over the mechanics of straight cash payments.

Outstanding credit card debt per population is considered a negative economic/financial statistic when it is high. It generally means credit is tapped out for consumers.

Having a credit card isn't a good indication of a person's ability to pay. That is generally measured by a person's credit rating which is generated from a history of the electronic payments a person makes. To get a high credit rating a person must always make payments on schedule. No late payments. This in turn allows a person to qualify for better loan standards & other benefits.

[arbifahrozy]

in my opinion the use of credit cards shows a person's ability to pay for something and can also facilitate transactions. with various credit card advantages such as being able to deduct and also facilitate transactions, credit cards are a good thing to have.

[X-Ray.12]

Credit cards are not an indicator of an economic development. It is just an instrument for transaction. Someone can have more money and never pay with the credit card.