Credit card debt at $1.5 billion, and arrears mount

Credit card debt at $1.5 billion, and arrears mountCosta Ricans have reduced slightly what they owe credit card companies, but the amount in arrears has increased.

The country’s 1.7 million credit card holders owe a staggering 729 billion colons or about $1.5 billion to credit card companies as of April 30, according to the latest figures from the economics ministry. The average debt per card is about 428,144 colons or  $867.59, based on a 493.5 rate of exchange.

According to the Ministerio de Economía, Industria y Comercio, Costa Ricans and others who hold credit cards issued here reduced their debt by 5.3 billion colons since January. That’s about $10.7 million. There was no information on what percentage was paid down and what percentage was a write off by the credit card companies.

All the data came from the 29 companies that issue credit cards. The largest is, of course, Credomatic de Costa Rica, which offers 67 separate types of cards. Banco Promerica is second with 41 different cards, followed by Banco Nacional with 32 and Credex World S.A. with 28.

Some 12.05 percent of the total debt was in arrears from one to 90 days, and 3.82 percent was in arrears for more than 90 days, the companies reported. That might explain why the annual interest rate on colon credit card debt is between 24 and 54 percent. Nearly 70 percent of the cards carry a rate between 40 and 49 percent, the ministry reported.

Arrears 90 days or less showed an increase of 2.28 percent since January, according to the study.

There was a slight increase, 0.15 percent, in debts older than 90 days, it added.

The interest rate on credit cards denominated in dollars was between 14 and 36 percent with about 74 percent of the cards carrying interest rates between 30 and 36 percent, said the ministry. About 40 percent of the accounts are in dollars.

The study noted that there also are 4.9 million debt cards in circulation.

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