This week I have decided to talk about the way people purchase stuff in both of the countries where I have lived. When you read this, please keep in mind that things have changed in Romania in the 3rd millennium and I have lived in the US since 2002. I would like to talk about the money habits I have observed in the adults that surrounded me growing up, as well as in my friends who still live in Romania, and who are now adults.
When I talk to American friends, even now, about the ease of getting credit (especially via credit cards) in the US, they are surprised to find out that I had never even heard of a credit card while growing up - outside of movies (if that). I remember being fascinated by the amount of mail people found in their mailbox in the movies while I went for many weeks between letters from penpals around the world - in the world before the internet. After I moved to the US and I told this story to friends here, I found out that most mail consists of junk and bills. So my fascination with it died a quick death - especially once I started getting my own junk mail.
Even now, when the banking system in Romania is much more developed compared to the 1990's and especially compared to the communist regime, there aren't many credit cards around - besides, most people still use the good old, hard cash when paying. Many of the mom and pop retail places don't even deal with any plastic. So if you believe in supporting local businesses, you don't really have a choice but use cash.
When I first moved to the US, I had to figure out first what a credit card was, then what a credit history meant. I came from a country where you got a loan for a big ticket item, like a house, based on the fact that you had a steady job with decent pay. Nobody has a credit history somewhere for lenders to see, and a credit score is a foreign word - literally and figuratively. Getting my first credit card was exciting - event with a $500 limit, not because I could spend more, but because someone (albeit be it a big bank) believed I was trustworthy enough to have access to $500 that were not mine.
Of course, in the passing years, I learned that I wasn't that special, since almost every young American who turns 18 has the opportunity to into as much debt as he/she wants to. I found out that credit cards are a necessary evil if you want to have good credit - which allows you better interest rates on things many people can never pay cash for, such as a house or a good car. I also learned that they can get people in a lot of trouble because they show you there is money to be spent, even though it is not yours and you have to pay it back - with interest (and what an interest).
If I didn't scare you with all this talk about credit cards, we'll talk some more next week.