In the first quarter of 2016 cardholders delinquencies decreased, but the total arrears remains at a relatively high percentage of 10.3%.
From a report issued by the Ministry of Economy, Industry and Commerce (MEIC):
Study on Credit Cards
- Balance of debt on credit cards up to 31 January recorded an increase of 7.15% over the previous quarter.
- The average balance of outstanding card debt is ¢398,000 colones.
In April 2013 the credit card portfolio in the country grew at a rate of 24%, well above the 10% growth recorded in the same month this year.
The slowdown in economic activity, greater awareness in the use of debt and changes in the regulations requiring risk ratings from the banking system are some of the reasons behind the decline in the growth rate of the number of plastic cards circulating in the country.
72% of the credit and debit cards circulating in the country have interest rates in colones ranging from between 40% and 50%, while the default interest varies from 24% to 65%.
From a statement issued by the Ministry of Economy, Industry and Trade (MEIC):
The Ministry of Economy, Industry and Trade (MEIC), through the Directorate of Economic and Market Research, presented a study on debit and credit cards in which it was determined tha 72% of cards existing in the market have interest rates in colones, ranging from between 40% and 50%.
Up to July 31st 2014 the number of cards in circulation amounted to 1,817,845, 5% more than at the end of April of the same year.
From a press release issued by the Ministry of Economy and Finance in Costa Rica (MEIC):
San Jose 03 September 2014. The third quarterly survey of credit cards up to July 31 shows that there are 28 issuers, 394 types of cards, 1,817,845 cards (plastic) in circulation, representing an increase of 86,172 cards from the previous study (5 %) as well as a balance of effective debt of 836,118 million colones (up 3.1% over the balance of 30 April).
As of January 31st 2014 the number of cards in circulation amounted to 1,729,945.
From a press release issued by the Ministry of Economy and Trade:
In the past 18 months, Costa Ricans in total increased the debt balance of their credit cards by on average 1% per month, the equivalent of more than $7.2 million every 30 days, as confirmed by the latest survey by the Directorate of Economic and Market Research at the Ministry of Economy, Industry and Commerce (MEIC).
At the end of October 2013 the number of cards in circulation amounted to 1,723,306.
A press release from the Ministry of Economy, Industry and Trade of Costa Rica reads:
Costa Ricans owe in total $1,496 million in balances on credit cards, which is an increase of $21.5 million (1.46%) compared to the latest study by the Directorate of Economic and Market Research, according to the cut made up to October 31, 2013.
Credit card debt grew by 1.5% to a total of $1.482 billion, while the number of cards in circulation up to July 31, 2013 was 1,731,673.
A press release from the Ministry of Economy, Industry and Trade of Costa Rica reads:
The Ministry of Economy, Industry and Commerce (MEIC) through the Department of Economic and Market Research has conducted its latest study on debit and credit cards.
The Board of the Central Bank says that any attempts to control prices and restrict competition will drive the informal economy.
Nacion.com reports that "The Government submitted, in late August, to the Legislative Assembly a Bill on Consumer Rights in relation to Usury in Credit Cards."
"... The initiative defines as usury loans rates which exceed twice the average of the last three months of the average lending rate of National Financial System, calculated by the Central Bank. Currently, the rate in colons is 15.88%, therefore that the cap would be of 31.76%. Anything over this would result in intervention by the Ministry of Economy, Industry and Commerce (MEIC) to regulate the market. "
A bill proposes to limit interests on all forms of credit, prohibiting setting interest rates unilaterally.
A press release from the Ministry of Economy, Industry and Trade of Costa Rica reads:
The President of the Republic, Laura Chinchilla Miranda, Vice President Luis Liberman and the Minister of Economy, Industry and Trade, Mayi Antillon Guerrero, today introduced a bill that seeks to establish limits to define credit usury, through the establishment of economic indicators that would be adjusted periodically.
Between April 2012 and the same month this year, the credit card portfolio of state banks grew by 8.5%, while among private banks the increase was 33%.
The increase in the private sector is not surprising, since Banco Promerica alone has 35 types of credit card rates, being the issuer with the most diversity in the country. The dynamism is also reflected in income from fees which the banks charge for the use of plastic, accounting for 46% of total revenues.
The Economy Ministry presented the quarterly survey on credit and debit cards, through October 2010.
Regarding credit cards during for this period, there were 29 issuers with 403 types of plastic.
If debt was distributed equally among the economically active population, it would represent a per capita debt of $ 837, which is almost double the minimum wage.
New rules forbid issuers from “stalking” cardholders in order to collect pending payments.
The banking industry stated that limiting their ability to call debtors will result in higher delinquency, and that they will object the measure at the constitutional court (Sala IV).
From Nacion.com: “According to article 35 of the new regulation, companies cannot attempt collection techniques with someone different than the client, and they can’t call debtors more than three times, according to article 18”.
New regulation to be enacted by the Economy Ministry has created controversy among credit card issuers.
Velia Govaere, vice minister, commented that the proposed changes will introduce more information transparency.
On the other side, Gerardo Corrales, CEO of BAC San José, argues that the changes would increase costs and complicate the operation of credit card issuing companies.
A MEIC study found that credit card issuers charge interest rates between 20% and 54%.
There are 27 issuers in the country, whom collectively offer 407 different products, according to the study by the Economy, Industry and Commerce Ministry (MEIC).
The most expensive credit cards are: Compra Facil, issued by Medio Pago (54% interest rate), Vista International issued by BCT (50.4%) and Master Card issued by Citi (49.32%).
A new regulation code overseeing credit cards, by the Economy Ministry (MEIC), will come into effect on November 3.
Automatic teller machines will be obliged to show on-screen any fees charged for cash withdrawals or statement queries.
From Elfinancierocr.com: "Issuers will also be required to issue detailed credit card statements, showing the main balance, current interest, interest applicable to the specific period, interest for delayed payments, and the monthly interest rate".