Yasmine Saleh certainly knows how to use a credit card. A 22-year-old university student, Yasmine got her first credit card on her 18th birthday and has had one ever since. "My parents wanted me to have a card for emergency situations or for when I need to make big purchases, she said. Though her parents have not given her specific limits, she says that they expect her to buy things "within reason. "I don't think I spend that much - sometimes when I go shopping I get a couple thousand pounds worth of stuff, and when I travel I have to buy a lot of things that I can't get in Egypt, but other than that I think my spending is reasonable, she said. But what happens when it comes time to pay the bill? "I'm not sure, my father takes care of those things - I don't get involved. For young credit card users like Yasmine, what Daddy does with the credit card bill will soon become a matter of public record. Beginning in January of 2009, the behavior of Egypt's credit card users, young and old, will be tracked through the country's first credit bureau, i-Score. This new system will monitor the habits of Egyptian consumers by compiling information on their bill payment behavior - everything from phone bills to credit cards - to give each individual a credit score that will either help or hinder them from getting credit in the future. Despite the importance of this development for Egypt's financial markets and the impact it will have on individuals, awareness about the new bureau remains low. Tarek Ashraf, a 25-year-old engineer and credit card user, had never heard about the new system. "I'm surprised and worried because even though I pay my bills on time usually, I have a lot of friends who just don't pay them because there have never really been consequences for not paying before. People just don't really think about it, he said. Ignorance about the new ratings system could mean credit disaster for chronic defaulters, but even if it didn't the question of how bad credit card habits have gotten so out of control remains. Does the fault lie with parents, banks, credit card companies or with card users themselves? "I think it's a combination, said Ashraf, "I never thought that having a card was big deal and getting one was easy. No one really ever gave me advice about using one or told me about what could happen if I spent too much or didn't pay. Credit cards can be obtained at any of Cairo's major banks, or through the offices of major providers such as VISA, MasterCard and American Express. Customers can also apply for cards online. Speaking with customer service representatives and perusing websites, getting access to large amounts of credit seems almost too easy. Of the three websites, only MasterCard's has a section entitled 'consumer education,' and service representatives have no need to offer warnings to young customers about the dangers of bad credit. Of course, credit card companies are in business to sell their services, regardless of whether or not a customer needs or can actually afford a card. Banks are in a similar situation. "We try to give our customers what they want as much as possible - credit cards are not the best choice for everyone, but as long as they fit the requirements they are eligible for a card, explained a customer service representative at Bank Paribas. Evidently, Egypt's young credit card users can only rely on themselves and the friendly advice of parents and friends when it comes to making decisions about how to navigate the world of credit, though, as in Yasmine's case, these aren't always individual considerations. "I live with my parents and I'm still a student so they pay my expenses - so even if I spend a little too much I'm not worried that it will affect my credit rating because I know my father will take care of it. I guess that will change though once I become more independent, she said. Still, it is up to parents to help their kids establish proper spending and payment habits to ensure their access to good credit in the future. It can also be expected that as the importance of establishing a good credit rating becomes more important in Egypt, more services will be offered to consumers to raise awareness about credit-related decision-making. This has been the case in the United States, where companies like VISA have launched awareness programs to alert consumers to the dangers posed by bad credit. VISA has even created a special program for students called "What's My Score that is working to promote financial literacy among young credit card users. At the same time, the aggressive marketing of credit cards to college students and recent graduates has led to a high level of debt among young consumers in the United States. Whether or not the same fate will befall young Egyptian credit card users is a matter of opinion, but in a culture where most credit card users come from the wealthy upper class, and where the expenses of most young consumers are covered by their parents, raising awareness about the future of Egypt's credit card system is essential. To read the other stories in our bi-monthly special focus on Egypt s banking sector, click here:http://thedailynewsegypt.com/article.aspx?ArticleID=18082http://thedailynewsegypt.com/article.aspx?ArticleID=18081http://thedailynewsegypt.com/article.aspx?ArticleID=18079
