Credit card limits will increase

2023-05-22 01:28:08

Credit card limits will increase

After knowing the hard inflation data for April, Sergio Massa communicated a series of measures to moderate the sharp rise in prices. In the last hours, the Minister of Economy reached an agreement with banking chambers and will announce this Monday that credit card limits are increased.

The announcement that is expected this Monday will be under the name of the “Strengthening of credit to the private sector and improvements in the regulatory framework” scheme. “It is an important measure in this context because it is aimed at sustaining consumption, increasing investment and reducing the damage of the drought,” sources at the Ministry of Economy reported.

The agreement was reached with the Association of Argentine Banks (Adeba), which brings together national capital entities, and with Abappra, which brings together public and private banks.

“More than 20 million Argentines will be able to buy 30% more. For every $10,000 pesos available in a payment, 3,000 more pesos are added; and if a family had 50,000 pesos of credit on their card, now they will have 65,000 pesos,” they added from the Palacio de Hacienda.

In turn, from the banking sector, they assured that “this effort must be complemented with actions of the State and of the political leaders of all sectors, which allow the macroeconomic ordering necessary to achieve the reduction of inflation.”

“Modifications to the regulatory framework are also required in order to promote the channeling of society’s savings towards credit, efficiently and avoiding the generation of distortions, especially those generated by setting minimum rates,” they added.

These measures are added to the two announced last week that seek to sustain retail consumption, such as the reduction of the Now 12 rate and the interest balances for credit cards, in addition to the increase in refunds to vulnerable sectors for card purchases debit.

Credit cards: how will the increase be

– Purchase margins on credit card installments will increase by 30%.

– The margins of purchases with credit cards will be increased by 25% in one payment.

– The margins for advances in checking accounts for MiPymes will increase by 25%.

Credit cards: another benefit

Since May, the limit has been increased to $40,000 to withdraw cash with a debit card in businesses. Until now, customers could withdraw $30,000 from merchants where they paid for their purchases with a debit card. This practice is called extracash, a modality that already represents 4.14% of the total volume of consumption with a debit card, according to the latest Prisma Medios de Pago index for the first quarter. In order to withdraw money, the customer must make a purchase with a card.

Interest for installments

The Central Bank (BCRA) announced after the meeting of the economic team on Saturday afternoon, an adjustment of 600 basis points in the annual nominal yield (TNA) for Liquidity Letters (LELIQ) and repos, which is transferred to fixed terms and which stood at 97% but there were also changes for financing with credit cards.

The monetary entity decided to reduce the rate for financing unpaid balances of credit cards for individuals by two points and since June it has fallen from 88% to 86% TNA.

“The decision of the monetary authority is based on the objective of tending towards positive real returns on investments in local currency and acting immediately to prevent financial volatility from acting as a driver of inflation expectations,” they detailed.

now 12

This is in addition to the announcement previously made by the Secretary of Commerce and explained that the Now 12 rate will drop, another measure along the same lines.

Sources from the Palacio de Hacienda specified last Saturday, when providing details on the battery of measures that were decided to implement that “as of next week the cost of financing will drop 9 percentage points in 12 installments.”

The lowering of the interest rate will be applied only for the term of 12 installments. Currently, the maximum rate that businesses adhering to the 12-month plan can charge is 77.35%, so it will now be 68.35%.