The fees have always served to beat inflation, but in the current complicated context, card purchases “deflate”
By iProfessional
09/04/2023 – 10,41hs
Purchases in installments have always been an excellent mechanism to deal with the increasingly high inflation in Argentina. However, at present, the limits that the banks themselves place on their clients for the use of credit cardssince they do not update these caps at the same rate as inflation.
The cold numbers indicate that purchases through credit cards registered a balance of two trillion at the end of March, 2,443,898 million pesoswhich translates into an increase of a nominal 5.2% compared to the end of February, which is below the 7% inflation estimated by private consultants.
Card purchases “deflate”, no doubts. According to the latest data supplied by the Central Bank, year-on-year growth reached 81.8%.
This number is well below 100%. what it is expected that they mark the inflation data that the National Institute of Statistics and Censuses (Indec) will announce on Friday.
What happens to reduce the “buy in installments” so that spending is liquefied by inflation?
The answers are various, from the increase in payment rates, up to the increase in the prices of products and goods that are not purchased with a card, up to the increase in the overdraft rate.
Julian Cuencafrom the consultancy “Economy and Society”, pointed out that “before, card expenses could be 50% of a family’s income, and with the other 50% daily expenses were made”.
Card purchases “deflate”
“The problem is that those ‘day-to-day’ expenses, such as the food, transportation, or services, they increased rapidly, and ‘ate’ that 50% that was left free, so you have to think twice before buying in installments,” Cuenca said in journalistic statements
Until February, the latest data provided by INDEC, the item “Food and non-alcoholic beverages” it had increased 102.6% year-on-year, in line with general inflation, and Clothing Presses and footwear 121%.
Details of the problem
If you go specifically to some fruits and vegetables, which have been moved by seasonal factors and as a result of the ravages caused by the drought in recent months, orange was, of those measured by INDEC, the one that increased the most with 294%; sweet potato, 280%; the potato almost 260% and the pumpkin, 208%, among others.
In addition, “since the government has decided on a policy of positive rates, it is no longer so cheap to buy in installments, because interest rates have also increased,” said the analyst.
The specialist in consumer issues, Guillermo Olivetto, talks about a “Cinderella effect,” where consumers “woke up to reality.”
“After the pandemic came out, there was a ‘boom’ of consumption in installments, from Coldplay recitals, to the acquisition of televisions to watch the World Cup,” Olivetto said in statements to channel A24. However, “100% inflation, economic stagnation and the lack of prospectscauses consumption to be ‘flattened’, and within that, that of quotas”.
