The balance of credit card debt in Costa Rica doubled in the last eight years, going from $1 billion in April 2010 to just over $2 billion in the same month in 2018.
The balance of credit card debtdoubled in the last eight years, going from $1.005 billion in April 2010 to $2.095 billion in April 2018, the Ministry of Economy, Industry and Commerce (MEIC) has revealed, by means of a report prepared by the Directorate of Economic and Market Research.
The number of cards in circulation grew by 13% between January 2017 and the same month in 2018, while the balance of debt on credit cards increased by 14% in the same period.
According to a quarterly study on credit and debit cards for 2018, with a cut off point of January 31, on average each person has two credit cards and three debit cards.
The number of cards in circulation grew by 13% between October 2016 and the same month in 2017, and the balance of the debt increased by 11% in the same period.
The last quarterly study of credit and debit cards for 2017, as of October 31, 2017 and carried out by the Ministry of Economy, Industry and Commerce (MEIC), registered an increase in the debt balance of ¢59.6 billion ( 5.24%), with respect to the previous quarterly study, for a total amount of¢1,196,995 million (approx.$2 billion), which represents around 3.68% of the Gross Domestic Product (GDP).
The number of cards in circulation grew by 9% between July 2016 and July this year, and the balance of debt increased by 23% in the same period.
From the quarterly report produced by the Ministry of Economy, Industry and Commerce:
San José, October 25, 2017.The latest quarterly study on credit and debit cards, carried outby the Ministry of Economy, Industry and Commerce (MEIC), through the Directorate of Economic and Market Research determined that there are 2,528,051 cards of which 32% correspond to additional cards, which are assigned to persons authorized by the holder, for example a relative or employee.
In 2010 average household debt per household was around $3,000, and last year, just six years later, the figure exceeded $6,500.
Data compiled by Nacion.com shows that the average debt of each Costa Rican household indicated in the analysis only takes into account financing with supervised entities, meaning that it could be be omitting loans taken out for consumption through other sources of unregulated financing, such as pay day lenders and pawn shops, among others.
Between April 2016 and the same month of this year, the balance of credit card debt in the country grew by 21%, equivalent to 3.7% of GDP.
From a study by the Ministry of Economy, Industry and Commerce:
San José, July 12, 2017.The latest quarterly study of credit and debit cards with a cut off point of April 30, made by the Ministry of Economy, Industry and Commerce (MEIC), through the Directorate of Economic and Market Research, analyzed growth of the debt balance and the number of cards for the last five years (from April 2012 to April 2017).In addition, this study determined growth of 51% and 60%, respectively, which is in line with the upward trend that has been seen in the quarterly studies.
70% of consumer spending is done using cash, 11% with other means of payment, 8% using debit cards and 7% by credit card.
Only 15% of commercial transactions in Costa Rica are made using debit or credit cards.The State of the Nation points out that although 14% of upper management "...
The bill against tax fraud authorizes the Ministry of Finance to return up to 1% of sales tax paid by final consumers.
The return of that percentage, which would be a maximum of 1% of the general sales tax, would be subject to ranges and types of trading activity, as explained in the Bill to improve the fight against tax fraud.
In April 2016 the balance of the credit card debt was $1.688 billion, 15% more than in the same period in 2015.
From a statement issued by the Ministry of Economy, Trade and Industry:
The study with a cut off date of April 30 determined that the balance of debt is 908.149 million colones ($1.688 billion) (3.02% of GDP), which represents an increase of 1.27% compared to the previous study (January), while the yoy increase was 15.4%.
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.
45% of Costa Ricans prefer to pay with cash than use debit cards, despite the fact that nearly 8 out of 10 possess this means of payment.
According to the latest study by the World Bank (WB), 53.6% of people over 15 years old in Costa Rica have at least one debit card, placing the country in fourth place in Latin America, just behind Brazil , Puerto Rico and Chile.
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%.
The union of restaurants in the country argues that tipping does not count as part of their profits and are asking for them to be exempt from the 2% retained on card payments by way of advance payment of income.
At the moment the Ministry of Finance is evaluating the request by the Costa Rican Chamber of Restaurants, since according to representatives of this guild more is retained from them than from other stores.