Foreigner's Finances

Money Around the World is a continuing series where I take a look at how different parts of the world handle money and what we can learn from it. Part 1 looked at credit card use in Asia and part 2 looked at Europe’s credit card habits.

South America is an emerging nation where a lot of growth is occurring. Just like a teenager, quick-growing continents can also go trough growing pains and this is what South America has to deal with in today’s economy.

Today, I’ll take a look at how 71 countries in South America use credit cards. As more and more people come into money, we’ll see if South American nations are being smart with their new credit or if abuse and debt is running rampant.

As usual, I’ll include some American credit card facts so you can have a benchmark to compare.

America

Population: 304 million

• There were 173 million credit cardholders in 2006, expected to rise to 181 million in 2010 (creditcards.com)
• There are a total of 1.5 billion credit cards in the U.S. (creditcards.com)
• At the end of 2008, Americans’ credit card debt reached $972.73 billion (Nilson Report, April 2009)
• The lowest credit card delinquency rate was 0.66% in North Dakota, while the highest was 1.98% in Nevada (Newton Daily News)
• The average American credit card debt was $5,612 in the third quarter of 2009 (Newton Daily News)

Verdict: Addicted to credit and debt. A dangerous combination.

Brazil

Population: 192 million

• 124 million credit cards – or 65% of the nation (creditcards.com)
• Credit card use up 327% in 8 years (creditcards.com)
• “Sao Paulo and Rio de Janeiro are 50% of the credit cards market while the South region represents only 8%” (encylopedia.com)
• In 2008, the value of credit card transactions reached USD$110 billion (creditcards.com)
• Brazil produces more cyber-criminals than any other nation (BBC.com)

Verdict: The leader in South American credit card use can’t handle the explosion of credit card users.

Colombia

Population: 44.5 million

• 6.3 million credit cards in 2008 – or 14% of the nation (creditcards.com)
• Credit card use has doubled in just 5 years (euromonitor.com)
• Credit card debt reached $4 billion in late 2007 (bnamericas.com)
• Visa is the most widely used card (lonelyplanet.com)

Verdict: Trying to hold down debt as credit card popularity soars.

Chile

Population: 16.7 million

• 23.2 million credit cards in late 2008 (creditcards.com)
• Chileans spent USD$1.64 billion in just the 1st quarter of 2009 (creditcards.com)
• Some businesses charge up to 6% to use a credit card (lonelyplanet.com)
• 29% of financial transactions were from credit/debit cards in 2009, up from 19% in 2003 (bnamericas.com)

Verdict: Businesses must stop fighting credit cards and let their customers spend away.

Argentina

Population: 40 billion

• 22.3 million credit cards in late 2008 – up from 17 million in 2007 (creditcards.com)
• From 2003 to 2007, credit card use grew 116% (creditcards.com)
• More credit cards are being offered to lower income applicants (euromonitor.com)
• Credit card advertising has skyrocketed (euromonitor.com)
• 10-20% charges are normal with credit cards (creditcards.com)

Verdict: Getting used to the fact that credit cards are becoming a part of daily life.

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If you enjoyed this post, check out the other Money Around the World posts:

Part 1: Credit card use in Asia

Part 2: Credit card use in Europe

Next week we’ll travel east and see how Africa is handling credit cards.

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Here are some recent blog carnivals I’ve participated in.

Carnival of Personal Finance: Parts-of-speech abuse edition at Mighty Bargain Hunter

The Last Carnival of Personal Finance for 2009 at Gather Little By Little

Carnival of Money Stories – New Year’s 2010 Edition at The Consumer Boomer

Carnival of Personal Finance #239 – Hot Money Trends of 2010 Edition at Darwin’s Finance

175th Edition of the Festival of Stocks at Inelegant Investor

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Photo: thejournery1972

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