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- Only 14% of Jamaicans have a credit card according to the Worldbank Global Findex Database.

- Credit Cards in Jamaica have interest rates averaging at 40.05% and ranging from 34% to 51.99% for Jamaican dollar cards.

A thread on credit cards in Jamaica

1/

#FinanceTwitterJa
Jamaica's usage falls in line with its ranking as an 'Upper Middle Income' country, which means that the credit card usage is higher than many 'Low Income' countries like Haiti and lower than 'High Income' countries like the US, UK and Canada.

The graph below shows this.

2/
In Jamaica a male is more than two times likely to have a credit card than a female. 19% of males have a credit card vs 9% of females. In other countries males generally have more than females but the ratio is somewhat closer (excepting Haiti).

3/
The average credit card interest rates in Jamaica are about 40% according to the BOJ credit conditions survey .

What many may not realise is that the interest rate that is quoted by the financial institutions is actually a nominal rate that is convertible daily..

4/
Unless you are really into the theory of interest that may mean nothing to you, but it generally means that interest is charged per day. If you were to convert the avg rate over the past 6 months of 40.37% to an effective annual interest rate it would translate to 49.7%.

5/
In examining the rates and benefits across the different financial institutions, the lowest rate in JA dollar denominated cards is from JN Bank at 34%. The info in the table below is for Jamaican denominated cards as at Dec 31, 2019 but check with the FI for confirmed rates.

6/
My advice on using a credit card responsibly:

A) Pay in full: Pay the full amount of your balance by the due date. Using a credit card to the max & then only making the min. pmt may be tempting, but avoid it if you can. If you can only make the min pmt ensure you do so on time.
B) Use it to build credit history: A low-limit credit card is actually a great tool to build your credit, especially if you aim to purchase something much larger like a house in the future. Repay what you owe and repay on time.

8/
C) Pay less interest: If you don't make the full payment, your credit card company charges you interest. One thing many people don’t realise is that if you don't pay any of your outstanding balance (if it is even 1 cent short) then you pay interest on the ENTIRE balance. 9/
D) If you do have credit card debt: Pay down the highest interest rates first OR consider debt consolidation if it has reached an unmanageable level. An unsecured loan at a rate of 20% would mean you are paying less than half the interest you would be paying on your credit card.
E) Avoid cash advances, ATM withdrawals and those cheques that come with your credit card: because the interest rate for using those features are higher. There is always an option with lower interest rates than a credit card. Dont pay unnecessary fees! 11/
F) Check your credit reports annually to ensure your repayments are being recorded correctly. I wrote a thread on this here:

12/
G) Monitor your spending. Check your c/card statements each month to ensure you aren't being charged erroneously. If your bank has credit card transaction notifications sign up for it! I've been able to thwart scammers when I got texts that my card was being used in Russia. 13/
In my tweet on budgeting I discuss my daily expense tracker that I use to monitor my credit card transactions and compare to my credit card statement.


14/
H) Get Rewards. If you use your card responsibly & pay in full every month, and you have a card that provides rewards like cash back/airline miles then the benefit of those cards can sometimes be larger than the annual fee that the credit card company charges! 15/
All the best for 2020 and good luck in achieving your personal finance goals! Visit my article on the credit card market here: financialcentsibility.com/credit-cards-i…

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