By Rigoberto Borrego*
The total credit granted through bank credit cards is 7.6% of the total credit in the entire banking system, according to the Multiple Banking Report issued by the National Banking and Securities Commission CNBV, with figures as of February 2023. .
Only 15 banks out of the 50 reported participate in the issuance of credit cards in the country. 86% of the system’s total portfolio is concentrated in 5 of them: BBVA has 31.4%, followed by BANAMEX that has 23.7%, then SANTANDER with 14.1%, It is followed by BANORTE with 9.9% and the fifth is HSBC with 6.9%.
Without a doubt, we can affirm that there are 5 banks that have dominance of the market in Mexico and that they have been consolidated for a long time as the main issuers. Although there is always room for other actors, they do not represent a major threat so far.
Each of the banks has products segmented by type of customer to set different rates. Thus, in what are classic credit cards with a limit of less than $4,500 pesos, the Total Annual Cost (CAT) varies from 23.9% the cheapest granted by BANREGIOup to 144% the most expensive granted by BANORTE, according to data from Banco de México.
For classic cards, with a limit between $4,501 and up to $8,000 pesos, the CAT ranges between 52% and 116.6%, granted by HSBC and BANORTE respectively. For the classics with a credit limit between $8,001 and $15,000, the cheapest CAT is once again from HSBC with 49% and the highest is SCOTIABANK with 105.2%.
Continuing with the classic cards with credit limits greater than $15,000, the 20.7% CAT granted by BANREGIO is the lowest and the CAT of 100.6% of the INBURSA WALMART card is the most expensive.
Regarding gold cards, the lowest CAT is from INVEX and the highest CAT is from AZTECA with 22.4% and 98.4% respectively. For platinum cards, BANREGIO’s 26.7% is the lowest and SCOTIABANK’s 69.9% is the highest.
There are three important reflections that we can make from the numbers that the CNBV and BANXICO give us:
The first is, that In Mexico there is a portfolio of almost $476,000 million pesos in bank credit cardswhich tells us that the Mexican market takes credit in instruments that are designed to be means of payment and not credit products.
The second is, that The Mexican market analyzes little the rates and products granted by different banks and that credit costs are not important to people as long as they have access to it.
The third is that a market can only behave this way if it has very little financial education and This lack of financial culture has been and continues to be taken advantage of by banking institutions to have businesses with very high margins.which are not found in other countries of the world.
It hurts to see that, in Mexico, even with the massive use of the media, people continue to make options that are clearly not convenient for their interests and for the benefit of a few banks. Even when the publication of costs by the government has been regulated, the information makes it clear that they are not consulted and are not a decisive factor in choosing the most convenient type of credit to be used.
We urgently need to train in the use and management of money, from the basic levels of education to higher education, only in this way will we be able to eliminate these bad practices for the benefit of institutions that take advantage of these gaps to do business. You have to know how to consult the CATit can save you a lot of money.
*Rigoberto Borrego is director of Postgraduate Business Studies. University panameric.
Editor’s Note: This text belongs to our Opinion section and reflects only the author’s vision, not necessarily the High Level point of view.
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