The month of March becomes a headache for many people in Chile due to the high expenses they must face. The purchase of school supplies, registration fees, payment of vehicle license plates, insurance and contributions are just some of the expenses that Chileans must face. The situation worsens in a context of economic crisis that is affecting many families.
A recent investigation by Chiledeudas.cl, which included 3,000 people, produced worrying data. According to this study, 80% of Chileans are resorting to debt to meet March expenses. This figure represents an increase compared to previous measurements, which reached 75% of the national population.
Guillermo Figueroa, director of Chiledeudas.cl, indicates that people are taking on debts to cover March expenses, mainly through credit cards, which represent 50% of the total. Cash advances are the second most used means, with 40%, followed by consumer loans, which were relegated to last place with 10%, due to current banking restrictions due to higher interest rates in the country.
Most of those who borrow to face March expenses belong to the most vulnerable strata and the middle class, representing 85% of the total. Figueroa warns about the situation: “The current financial crisis is wreaking havoc on Chilean families, and the most worrying thing is that people are using more and more cash advances, the most expensive product on the market that is easily accessible.”
Debts are not bad in themselves, but over-indebtedness is negative, since it can lead to delinquency in which 5 million people in Chile would find themselves this year. It is important to keep in mind that responsible borrowing should not exceed 50% of the monthly income of the person or family group.
To deal with this situation, Figueroa suggests that, in case of having to use retail credit cards for March purchases, all expenses are concentrated in one plastic to avoid duplication of monthly commission and interest charges. In addition, it is recommended to quote in different financial entities to compare the Equivalent Annual Cost of the credit and, as far as possible, try to have the loan agreed in the fewest possible installments.
