Despite the projections of specialists in the field, around the effects of the inflationary situation on banking, to date, cardholders in Panama have not suffered the rise in interest rates on this type of product.
This is detailed in a recent report by the Authority for Consumer Protection and Defense of Competition (Acodeco), published this month.
However, those who use their cards as a means of financing the superintendent of Banks of Panama, Amauri Castillo.
For their part, international experts recommend spending only the cash that credit card users have available, since it is not a good idea to get into debt with long-term consumer credits.
Panamanian cardholders will see the effects of inflation on interest rates, however, it will be with a little more “laze” compared to other bank services. Due to the type of product, credit cards will not have the same difficulties.
According to Castillo, the increase in bank interest is something that “must be seen from liabilities.”
The expert commented in a conversation with La Estrella de Panamá that the customers who will have to pay the most attention to the increase in interest rates are those with loans, mortgages to corporate or commercial credit.
There may be adjustments, but they will not be extraordinary changes. Low-risk customers will be the least affected, but cardholders who use their products for financing will see more repercussions in the long run,” said the superintendent.
The Acodeco report called ‘Comparative analysis of costs, annual nominal interest rates and annuity of some credit cards and other financing cards’, points out the lowest and highest average nominal interest rates, as well as
impact on the interest on credit cards, the report does not show major variations in the percentages, when compared with the same period of the previous year.
According to the data in the report, the bank with the highest annual nominal interest is Banco Ficohsa (Panama) S.A. with the Visa or Mastercard in its Classic Cash Back version and the Standard version, which has a percentage of
with the lowest average annual nominal interest rate is Citibank S.A., which with the business version of its Visa or Mastercard cards exempts its customers from payment; after this entity, MMG Bank Corporation is the bank with the lowest interest rate for its customers with 9.00%, with the Corporate Visa or Mastercard, like Citibank.
In the case of annuities, the banks that exempt their National Bank of Panama for the Corporate Visa or Mastercard. For its part, the Multiple Service Cooperative Edioacc, R.L. does not require an annuity for its Visa or Classic Mastercard, Visa or Mastercard Gold cards and the Visa or MC Platinum version.
Situation in Latin America
The Financial Superintendence of Colombia announced in early February that the annual effective rate would rise to 45.27%, which represents an increase of 200 points compared to
decrease in credit activity in the first months of the year, the demand for resources will increase due to inflation and will depend on the economic situation of the country.
In Guatemala, since last year, economists expected an increase in loans and credit in the country’s banks, which harms investment decisions.
In Honduras, since September 2022 the passive interest rate has been increasing. According to information from the Central Bank of Honduras (BCH), in the first week of January the rate was at 6.40% for deposits of the national currency of the Central American country.
According to the World Bank, the increase in interest rates could be due to the threat of a financial crisis and economic recession worldwide.
For this reason, banks around the world are increasing these percentages to levels never seen In fact, this multilateral organization and different investors around the globe expect central banks to increase their global monetary policy rates by up to 4% over the course of the year.
This figure is two percentage points above the average in 2021.
To achieve low inflation rates, monetary stability and faster growth, policymakers could shift the focus from reducing consumption to increasing production. Policies should aim to generate additional investments and improve productivity and capital allocation, which are fundamental for growth and poverty reduction,” says the president of the World Bank Group, David Malpass.
In addition, he reflects saying that global economic growth continues to decline rapidly, which increases the chances of entering a recession; this is worrying for developing economies and people in emerging markets.