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Bitter Oct 7th, 2003 07:21 AM

Credit Card Debt
Is high credit card debt a problem for Europeans? Are cc's readily available to most Europeans, and what rate of interest is charged? Many of us in the US get cc applications almost daily in the mail. I read that the average American household has $8,419 in CC debt. [The source cited is the J. of FinancialPlanning, April 2003] That seems outrageously high.

Kate Oct 7th, 2003 07:31 AM

Can't speak for the rest of Europe, but the UK is exactly the same as the US in this respect. I get mailed every day (sometimes by more than one company), I have 2 credit cards (2 too many) who's rates are about 12.9% (althogh some cards are higher - up to about 17.9%).

They raise my limit whenever I clear my card - I now have a credit card with a 15k GBP limit. Madness! I could go out a buy a car! (a decent one at that).

Bitter Oct 7th, 2003 07:36 AM

Kate: That is fascinating, but scary. Is the "Barclay Card" the primary CC in the UK? I have heard of it through its sponsorship of Premier League events, and heard someone on a BBC show saying she was "putting it on her Barclay" or something like that. (In the US, Visa seems to me to be the most widely used card).

Dick Oct 7th, 2003 07:37 AM

While I am sure that CC debt in the US Ishigh, that figure may be flawed.

THE $8419 includes people that pay off their balance each month. Although, my credit report reflects the current balance on my account, I pay it off each month.

I have not seen a figure that reflects the debt that is carried over each month( and interst paid) as opposed to current "debt".

Many people run large amounts through a CC just to get the FF miles....and pay off the amount monthly. Technically, it is stil debt.

Calamari Oct 7th, 2003 07:42 AM

Hi Bitter,
It has been my experience that our friends and family do not have ANY credit card debt at all. "Credit cards" function differently over there then they do here from what I have been told. The credit card concept is a relatively new one over there. First of all, and I am primarily speaking of Italians, they do not like the concept of buy now pay later. Most still opperate on a cash basis. It was impossible for them to understand why we were using our AMEX every chance we got in order to get a cash back rebate. They simply did not get it. Travel miles? Forget it. They never pay for groceries, restaurants or daily necessities with credit cards or even checks. Their credit cards function like a debt card, Bancomat. They must have a set amount in the bank and can use their card against that amount only. When they purchase homes, their down payment is at least 50% (one reason so many people live with their families well into adulthood). Automobiles are financed through banks the same way that they are here but for much shorter terms. Down payments are high too. We were so shocked that even after all of these years, we could not purchase tickets at a local travel agency in Florence with our credit card. Some businesses just do not accept them. Cash only. Because they are less transient then Americans they are often extended credit by local, smaller merchants in their areas and pay the balances at the end of each week or month. One last thing, when I worked in Italy it was so strange to get used to getting paid ONCE A MONTH. I think they know how to budget better then we do. Hope this answers your question.

Kate Oct 7th, 2003 07:46 AM

Hi Bitter

Barclaycard is a well-known credit card - I think it was the first one issued here in the 1970s, and so many many people used to have one (myself included).

But it is still a VISA card - Barclays is the name of the issuing bank (Barclays Bank is one of the Big 4 high street banks in the UK).

Barclaycard is less popular now as its rates are one of the highest.

As in the States, Visa is the most popular choice (both my cards are Visa, but are ussued by different banks)

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