Exporting Credit Card Debt

I am often asked why credit card debt is such an American problem, and my usual answer is that, with some exceptions, other countries haven’t caught up with us yet. We lead the pack in indebtedness. The latest installment in the NY Times series on debt shows how the rest of the world is catching up. For some time, the UK and its former colonies (US, South Africa, and Australia) have had debt problems, but now credit cards, and the problems associated with them are spreading to Asia and Latin America. The article highlights problems in Turkey and South Korea.

Few American exports have proved as popular as credit cards. In just a generation, they have gone from a totem of Western affluence to an everyday accessory in Brazil, Mexico, India, China, South Korea and elsewhere. More than two-thirds of the world’s 3.67 billion payment cards circulate abroad.

The world map displayed below shows an expanding pattern of debt. Most of the light areas that have no debt are third-world countries where poverty is so desperate that credit cards would have no purpose. As time passes, this map is likely to go in one direction only: toward darker shades of green and increased credit card debt. It is troubling to think of a future world economy in which every developed nation has a citizenry strapped with debt and chained to their jobs in an effort to meet their monthly obligations. Is this an export the rest of the world really wants?