Costa Rica credit card debt soaring despite astronomical 40-50 percent interest rates

October 26^th, 2015 (ICR News) According to the most recent study by the Ministry of Economy, Industry and Commerce (MEIC), 72 percent of credit cards issued in Costa Rica carry interest rates ranging from 40 to 50.4 percent.

For credit cards issued in dollars, 74 percent carried annual interest rates between 30 and 36 percent.

Despite this – or perhaps as a result – the amount of credit card debt carried by Costa Ricans is soaring.

In the last 12 months, Costa Ricans piled on a combined total of some US $87.2 million in additional credit card debt, compared to the year prior when Costa Ricans added some US $20.5 million to their combined credit card balances.

Total credit card debt in the country amounted to some ¢798.6 billion, or nearly $1.5 billion US dollars, as of July 31st, a figure representing 3.28 percent of the country’s GDP.

Meanwhile, 12.76 percent of cardholders are arrears in their payments.  Those in arrears by 90 days or more represent 4.91 percent of cardholders.

As of July, there were more than two million active credit cards with an average balance owed of US $750 each in the wallets of Costa Rican consumers.

In August 2013, then-President Laura Chinchilla signed a bill that would limit the maximum interest rate charged by credit card issuers and department stores.

The bill and subsequent iterations, however have remained stuck in the Legislature since receiving the former president’s signature.