“In February, the start of the school term surely brought a correlate in the increase in the balances of this item. During this time of year, updates to the credit limits for cardholders are also expected by the Financial Entities, this will allow consumers to increase purchases on credit in one or more installments. The increase in the active rate that began to govern in March 2022, taking them from 43 to 49%, favored the maintenance of installment plans with and without interest”, assured Guillermo Barbero,
On the other hand, operations with credit cards in dollars registered a year-on-year rise of 151.1%, although with an irregular monthly behavior. During the first three months of the year, it was increased by 51.4%. In March they decreased by 11.6% compared to the previous month. “The reactivation of trips abroad as a result of the fall of many of the restrictions imposed by the pandemic, originate the appearance of consumption in foreign currency. However, we must emphasize that the balances currently reached are well below those reached in the years prior to the appearance of COVID-19, when monthly stocks reached US$600 million,” concluded Barbero.
The rise in rates by the Central Bank increased the cost of funding for banks, because they have to pay more for fixed terms, and therefore the cost of financing through the 12 installments became more expensive.
In this way, Using an annual installment plan through a bank credit card went from 75% to 78% of the nominal annual rate.
The cheapest alternative continues to be Now 12, which has a rate of 31% per year for 3, 6 and 12 installments, and 36% per year for 18 and 24 installments. At this time the plan is only valid for cards issued by banks. For example, Cencosud or CMR, are excluded from Now 12 and must pay financial costs up to 200%.
It should be noted that it is always important to verify the CTF (Total Financial Cost) which is the true value that will be paid. LA TNA does not include VAT, commissions or other administrative charges. If the 78% of the TNA applied by the banks for the 12 installment plan is taken into account, the CFT can rise up to 150% per year.
Source: Ambito
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