Love them or hate them, credit cards make the world go round. After all, how could you possibly shop online without one! And what about all those frequent flyer points!

The first credit cards were merchant specific cards starting in 1900 with several hotels, but the true credit card was invented in 1950 by Ralph Schneider and Frank X. McNamara, aka The Diners Club! Chase and Bank of America (Visa) came out with their first credit cards in 1958, and then cards became most popular when the magnetic strip was available in 1970.

Around the world, there are now 10,000 credit card transactions made every second.

The average credit card debt per adult – USA is approximately $3,752 and Australia it is $3,141

Over 609.8 million credit cards are held by U.S. consumers and the average person holds 3.5 each

UK – the number of adults with a credit or charge card is 31.2 million, representing 64% of the adult population. And the average value of online credit card transactions is $140.

Australia – there are an estimated 36 million debit cards and 16 million credit cards in circulation. Mortgage, credit card and personal loan debts are up 71 per cent from just five years ago

In Singapore the number of credit cards issued has crossed the 6 million mark, which works out to approx. 6 cards per eligible cardholder

The average age of obtaining your first credit card is 20.8 years old

New Jersey and New Hampshire, both at 20%, have the highest concentration of credit card holders with 10 or more cards.

Visa is by far the most popular card, followed by Mastercard and Amex.

Call it poor planning or a holiday hangover! If you charged $4,200 on your credit card in 2010, with an annual interest rate of 14.73 percent (the average APR), it would take you eight years to pay off the balance if you made no additional charges and made only the minimum payment each month. Even more painful, you’d rack up $1,343 in interest charges over that eight-year span.

Warning! Warning! They should be handled with care, and paid in full each month, if you want to avoid getting yourself in serious debt. So don’t rush out to buy that Chanel handbag or new set of golf clubs if you really can’t afford them.


To insure or not to insure?

The whole area of travel insurance is extremely confusing so hopefully this will help make your decision a little less so, next time you head overseas.

There are three main categories: trip investment (which covers trip cancellation or interruption), personal health (which fills in gaps in your normal health insurance), and personal belongings (which covers baggage loss and car rental damage). You should always have at least the first two. And make sure the personal health coverage includes both “medical evacuation,” which is the cost of getting you to an appropriate local hospital or clinic, and “repatriation,” which covers the cost of getting back home.

Top Tip – most people fail to recognise that most credit cards and health insurance packages already have some form of travel insurance coverage so you don’t need to buy more.

Credit card travel insurance usually covers everything, and of course platinum and higher level cards provide the best coverage. BUT most of the time you’ll only be covered if you paid for some, or all, of the international air tickets on the credit card, which is considered a trigger for the “activation” of the travel insurance. This means credit card travel insurance policies are useless for business trips (usually paid for by your company). So hopefully your company has something that covers you for work trips – it’s worthwhile asking as I have been caught out several times.

Luggage and personal items are covered well on credit cards, sometimes up to $15,000 per person, with a total of $30,000 for all family members. Standalone travel insurance policies quite often have limits as low as $2,000 for your baggage, so don’t assume you need an additional policy to cover this.

Of course, all the usual conditions apply – you may only get reimbursed for lost or stolen items if you have filed police reports within 24 hours, and only if you can provide original purchase receipts to prove ownership.

If you purchase the ticket for plane, train, bus or ferry on your credit card you will generally be insured against death or debilitating injury for a very high amount, such as $1,000,000 for the death of a cardholder. Regular travel insurance generally only pays out normal accidental death benefits of around $25,000 – $50,000.

And if you are lucky enough to have time off and are going on a long trip, choose your card carefully. Credit card insurance is often only valid for three to six months maximum, and unlike stand-alone travel insurance policies, can’t be extended.