Uncovering Mexico
Jeremy Schwartz is the Mexico correspondent for Cox Newspapers. He is based in Mexico City.What's on this page?
All the entries posted on February 06, 2008.
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Wednesday, February 6, 2008
Mexican credit card rates: cover your eyes
Heaven help Mexican credit card holders who don’t pay off their bills in time. Even as interest rates plummet in the United States, interest rates on Mexican credit cards are enough to make any American gasp: the average interest rate right now stands at 34.27 percent, according to this morning’s Reforma newspaper. Several popular banks offer credit cards with an interest of more than 40 percent. The American Express Blue Card has annual interest rate of 37 percent here, according to the Reforma survey. Since April, interest rates have skyrocketed on some cards, as much as 15 percentage points.
Mexican banks say that worry about a slowing economy (growth rates here were recently downgraded to just 2.8 percent for 2008), lower employment numbers (Mexico’s biggest bugaboo) and high rates of loan defaults have caused the interest rates to surge.
Making things worse, the Mexican government says some banks are activating credit cards for consumers who never asked for them. “Clients frequently become registered in the credit bureau with debt from credit cards they’ve never had in their hands,” the Mexican government’s financial services watchdog Condusef told Reuters recently. “They’ve never received an account statement, but when they revise their status in the credit bureau, it says they owe $20 or $40 for commissions on credit cards they never asked for.”
Consumer credit and credit cards are a booming business in Mexico, growing an estimated 20 percent in 2007. But interest rates have never been kind to Mexican consumers and the Condusef has blasted banks in Mexico for charging exorbitant rates and fees. Most of Mexico’s banks are owned by financial institutions in Europe, which charge much higher interest rates in Mexico than they do in their home countries.
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Mexican media: advantage Hillary
Mexican papers, most of them at least, are giving the victory to Hillary Clinton in last night’s Super Tuesday elections, which were followed rather breathlessly south of the border. The front page of the influential daily El Universal features a huge photo of a pumped up Clinton addressing the crowd with the headline, “They voted for experience.”
La Cronica also featured a jazzed Clinton, juxtaposed with a somber photo of Barack Obama looking like his pet dog had just died. The headline was a little more restrained: “Hillary triumphs, but doesn’t deliver the knockout blow.” Both the Excelsior and Reforma newspapers featured large photos of the celebrating Clinton rally, without any visuals of the Obama fever in Chicago.
Only the left-leaning daily La Jornada newspaper took a different approach, casting last night’s primaries and caucuses in terms of Obama’s sudden surge. La Jornada was the only major metro to feature a smiling Obama on the front page and ran this headline, sure to warm the hearts of Obama’s many Mexican supporters: “Obama frustrates Hillary’s Super Tuesday hopes.”
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