As a result of the 21-point rise in the monetary policy rate, the Ministry of Commerce is analyzing at this time to update the nominal annual rate (TNA) of the Now 12 program, currently parked at 72.75%. The increase would occur in a context where the Federation of Commerce and Industry of the City of Buenos Aires warns that in July the number of users who finance themselves with credit cards fell 17% and merchants consulted by Ámbito detect difficulties in sales with the plastic as a method of payment.
The cost of financing is not only affected by the increase in the cost of the minimum or partial payment of the summary that arrives at the end of the month (it rose 19 points), but also puts the continuity of consumption in trouble, especially in durable and semi-durable goods. “The main reason behind the situation in which close to four million Argentines have abandoned their card lies in the caps on interest rates. The presence of maximum limits on rates, together with constantly increasing inflation, forces numerous banking entities to withdraw the cards of those clients considered to be at higher risk”, explains the institution, led by Fabián Castillo. Likewise, this newspaper consulted with two large banks and both agree that, for the moment, “there are no unusual cancellation requests, as well as the issuance”, as well as no increase in the minimum payment or refinancing.
Pablo Díaz, a seller in the area of heating and holistic medical equipment, assures that sales “are between 50% and 50%” and adds: “Many people do not want to enter into debt in installments, directly liquidate, make a single payment. Very few people have taken payments with direct card financing. If there were no promotions, they didn’t get involved, they preferred to pay for it in one installment and instead enter the programs Now 6 and Now 12”.
For his part, José Lilino, a member of the Argentine Confederation of Medium Enterprises (CAME) and a seller of household goods, affirms that the credit card “continues to be one of the most widely used means, because it is the cheapest instrument to finance themselves”, and more with government programs, although he claims that banks “extend the purchase limit for high-priced products”, especially since his sector “is going through a situation of low demand”. In his case, he exemplifies that an automatic washing machine “reaches $200,000”, but he runs into consumers who only maintain 75% of that amount as their assigned limit.
Along the same lines, sources from the Association of Argentine Electronics Terminal Factories (AFARTE) acknowledge that in the purchase of household appliances and electronics “they serve as a safeguard of value in inflationary contexts and the card plays a key role”, but they state that the ” card limits do not help when interest is high in the final cost, even if it is below inflation”. Vendors within the sector assure that in the last two months the sector suffered increases of 40%. The same banks previously consulted by this newspaper ensure that “financing limits are automatically updated considering the level of income and the customer’s debtor profile”.
Camilo Alan, a textile and footwear seller, remains cautious about how to readjust the financing plans after the devaluation effect and believes that, until the barrage of speculation and rebranding has passed, “it is difficult to accept the indebtedness, when the supplier sells us but in cash, so it is difficult for us to make card programs work”.
Meanwhile, the latest report from the Prisma Means of Payment Index indicates that purchases in one payment led in the second quarter of this year, representing almost 55% of the total, while installment plans were in second place, with the program ” Now 3”, represented by 39.67%. “The preference for short financing plans continues,” says the survey.
Source: Ambito
