Icelanders are in a league of their own when it comes to credit card use. Nearly half (46%) of all payments for goods or services in Iceland are made with credit card. Only one other European country tops 20%.
According to the Icelandic Central Bank (PDF) Icelanders use less cash than all European nations, with the exception of Brits and Norwegians. In Iceland 20% of purchases in Iceland are made with cash, compared to 17% in Norway. However, both Brits and Norwegians use debit cards, rather than credit cards, for their electronic purchases. Luxembourg is the only European country which comes close to Iceland in its use of credit cards, but the share of credit card purchases are roughly ten percent lower in Luxembourg.
Read more: First time since end of WWII: At end of Q3 2014 Icelandic assets abroad outstrip foreign debt
The Central Bank does not offer any theories as to why Icelanders use credit cards to a greater degree than other nations, but it should be noted that credit cards in Iceland tend to be paid off in full, or close to full, at the end of each month. Icelandic homes therefore balance their books by paying half of their expenditures with a revolving one-month credit.
The Central Bank also notes that cash has made a certain comeback in Iceland in recent years, having virtually disappeared from everyday use during the years after the turn of the century. The use of cash doubled following the 2008 financial meltdown, and the amount of bank notes in circulation has continued to increase in recent years. The Central Bank speculates that the reason is the growing number of foreign travellers.
Icelanders are in a league of their own when it comes to credit card use. Nearly half (46%) of all payments for goods or services in Iceland are made with credit card. Only one other European country tops 20%.
According to the Icelandic Central Bank (PDF) Icelanders use less cash than all European nations, with the exception of Brits and Norwegians. In Iceland 20% of purchases in Iceland are made with cash, compared to 17% in Norway. However, both Brits and Norwegians use debit cards, rather than credit cards, for their electronic purchases. Luxembourg is the only European country which comes close to Iceland in its use of credit cards, but the share of credit card purchases are roughly ten percent lower in Luxembourg.
Read more: First time since end of WWII: At end of Q3 2014 Icelandic assets abroad outstrip foreign debt
The Central Bank does not offer any theories as to why Icelanders use credit cards to a greater degree than other nations, but it should be noted that credit cards in Iceland tend to be paid off in full, or close to full, at the end of each month. Icelandic homes therefore balance their books by paying half of their expenditures with a revolving one-month credit.
The Central Bank also notes that cash has made a certain comeback in Iceland in recent years, having virtually disappeared from everyday use during the years after the turn of the century. The use of cash doubled following the 2008 financial meltdown, and the amount of bank notes in circulation has continued to increase in recent years. The Central Bank speculates that the reason is the growing number of foreign travellers.
