Bill Belew has raised 2 bi-cultural kids, now 34 and 30. And he and his wife are now parenting a 3rd, Mia, who is 8.
What is 300,000,000 times 3,000 x 18.25% / 12? That is how much the credit card companies think they will see coming in monthly AFTER China gets used to or as the case may be NOT used to using credit cards.
Chinese are savers – with abt $2 trillion in the bank. Consequently, when they buy, they pay cash.
Just 10% of all cars in China are financed compared to 60-70% in Europe and 80-90% in the United States.
Currently, only some 25 million Chinese carried “magic money” when they shop. It’s magic because when you use that little card, you don’t have to pay – too many people think.
The number two leader in China – Bank of China has issued only abt. 1 million credit cards compared to 95 million debit cards. In other words, the Chinese think if they don’t have the money handy, don’t buy it. Smart…real smart.
Now the JP Morgans and Citigroup’s want to see if they can mess that up.
South Korea went bonkers when its countrymen couldn’t handle the transition to “charge it!” The country is still recovering.
How will the scenario play out if suddenly China’s masses run up a credit card debt that can’t be paid off?
The strategy, apparently, is to target the wealthy in China, those who don’t need a credit card.
Sure, there is money to be made in financial services…a lot of money to be made. But, it won’t be pretty.
What do you think?