Are you under the impression that consumers all over the world generally adhere to the same consumer banking practices? If so, you are way off. And By comparing consumer banking practices in the United States and Australia, you will quickly see that there are some major differences. This does not mean that one country is better than the other or that one nation and group of people has a stronger grip on their money. However, it clearly illustrates that consumers in both countries take a different approach to their personal finances.
Here are several ways to look at how consumers bank in the United States and Australia – many of which show some very important differences.
Availability of Online Banking Tools
Before we go any further, it is important to note that both US and Australian based banks are at the forefront of the online banking industry. In other words, financial institutions in both countries are making major strides in their online services.
When doing a head to head comparison, it would be next to impossible to say that one country is ahead of the other. Both are deeply invested in online banking, making it simple for consumers to move their money around via the internet while also offering advanced features such as e-statements.
Mobile Banking Apps
If you live in the US or Australia you have probably heard the buzz associated with mobile banking. Those with a smartphone, either iOS or Android, probably realise that this is an option.
At the present time, US based banks have the edge in this department where more institutions are offering mobile banking apps. According to a recent study by KPMG, 40 percent of Australians are not aware of whether or not their bank offered mobile capabilities. However, it should be noted that Australian banks are working hard to bridge the gap and inform customers of new apps for mobile banking with all the ‘big four banks’ offering at least an iPhone app.
Saving vs. Spending
Due to the recession and more Americans being forced to live payday to payday, the savings rate has dipped. In fact, some experts put the rate as low as 0 to 1 percent – making things as bad as they have been for quite some time.
Although it is widely believed that the savings rate in Australia is higher, this is not saying much. Most experts put this number at approximately 2 to 3 percent. Australia is every bit the consumer economy that the United States is.
Personal Indebtedness
Australia has a major problem when it comes to personal debt. Not only does the country come out on top (which is not a good thing) when compared to consumers in the United States, but it goes one step further: it leads the world in terms of personal indebtedness.
If you compare Australia’s position to that of the United States, you will see just how bad things have become. Currently, the average Australian adult has debt of roughly $56,000. This is compared to the average debt of an American of $44,000.
When you add together personal loans, credit card debt, and mortgages, it totals more than AUD$1.2 trillion. To put this number in comparison, it is 71 per cent higher than it was just five years ago.
Real Estate Value
While the United States may be doing better in terms of personal debt, they are taking a huge step back in the real estate department.
In the last year, Australian home owners had no trouble, in general, making mortgage payments. In fact, nearly 50 percent overpaid on their mortgage. On the flip side, while the real estate market in Australia had been booming for years with a steady increase in property valuations, many analysts now think that the market is now on the edge of a precipice. It’s well known that in the United States, the housing market and mortgage industry has taken a huge hit over the past five years. More than 2.9 million home owners received foreclosure filings in 2010 alone. Along with this, there are currently 5.5 million home owners in the United States that are at least 90 days late on their mortgage. In short, this means that one out of every five home owners are late.
Chris writes for the CreditCardCompare.com.au, one of Australia’s leading impartial comparison services where they rank the best credit cards to make it easier for users to quickly identify the best money-saving or most rewarding offer based on their personal financial circumstances.
