Credit card debt grows in an unsustainable way

An economics ministry report earlier this week showed that Costa Ricans owe 933 billion colons or about $1.77 billion on their 5 million-plus credit cards.

A check of a similar report June 10, 2013, shows that the debt has increased some $293 million from 729 billion colons.

The ministry, correctly called the Ministerio de Economía, Industria y Comercio, also reported that the consumer credit card interest rates range from 24 percent, mostly at state banks, to 65 percent.

At these rates, considering the growth in debt over less than two years,  credit card dent does not seem sustainable.

Some expats in the rental business also are pointing to the decline on average rents. They note that rents determine the value of rental properties and that banks have made loans based on values indicated by higher rents.

These apartment owners also say that the availability of good tenants also has declined.

The rental situation and the massive credit card debt is a double whammy for financial institutions.

One reader said Tuesday that the consumer debt mirrors the debt the central government has accumulated with a national budget that is nearly half borrowed money.

The economics ministry estimated that the increase in credit card debt was 7.24 percent from a previous study. The current study includes figures as of Jan. 31.

Of course, these numbers do not reflect other types of debt, such as mortgage loans or other consumer agreements..

Some 7.31 percent of the credit users were behind from zero to 90 days, said the ministry. Some 4.27 percent were behind greater than 90 days. That would be about 39.8 billion colons.debt040115

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