The number of credit card holders grew by 1.6 million in the last two years in Argentinaof which almost two thirds were provided by public banks, whose customers with these payment instruments passed from 5.45 million to 6.42 million (+17.87%) between December 2020 and October 2022, according to data from the Central Bank (BCRA).
In that sense, total credit card holders went from 23.2 million to 24.8 million (+7.02%) in the entire financial system during this period, but the increase was much more significant in public banks than in private banks, where it went from 17.32 million to 18.04 million (+4, 14%).
Within public banking, the largest contribution was made by Banco Naciónwhich went from 1.59 million headlines to 2.19 million (+37.82%), and the Banco Provincia de Buenos Aireswhich went from 1.88 million credit card users to 2.03 million (+8%), from the end of 2020 to September 2022.
Historically linked both to the credit of large and medium-sized companies, public banks have come out in recent years to implement an active policy of facilitating access to financial services for small savers.
Opening accounts for free and through new cell phone applications such as cases How much DNI (Province Bank) and BNA+ (Nation Bank)are part of this strategy in which they have been working to reach the offer of private banks.
“We are taking a further step in terms of financial inclusion, broad and open for all sectors of the population. Above all, those traditionally and historically excluded from the banking system,” the president of Banco Nación, Silvina Batakis, told Télam.
One of the policies to expand the base of people with access to credit that Nación promoted in 2022 was Nación Simple, an account for those who work at least 12 hours a week in private homes, who carry out cleaning tasks, assistance and accompaniment to people, or non-therapeutic care of sick or disabled people.
“We are taking a further step in terms of financial inclusion, broad and open to all sectors of the population. Above all, those traditionally and historically excluded from the banking system”Silvina Batakis
The account has a free opening and includes the salary account with a debit card and a Visa or Mastercard credit card also free of charge, with the initial limit equivalent to a minimum wage ($67,743).
For its part, Banco Provincia decided to lower the minimum income required to obtain a package of products, which allowed more than 340,000 clients and clients who did not meet the requirement to access financing with credit cards.
In this way, by 2023 it estimates a growth of the order of 46% in the stock of packages and of 25% for that of credit cards.
“This year we are going to deepen our strategy drawn up during the last three years, which was to increase the inclusion of Buenos Aires residents in the financial system, in line with a request from Governor Axel Kicillof for public banks to provide the entire population access to its range of products and services”, assured Juan Cuattromo, president of Banco Provincia, to Télam.
The search to financially include more people has an important leg in access to a credit card.
It is that, at present, the rate that banks charge to those users who pay the minimum payment to finance statements of up to 200,000 pesos, known as the “revolving rate”, is a nominal 77% annual rate, which leads to a rate about 140 percent effective.
Although it may be thought of as expensive at first glance, it is one of the lowest rates on the market, well below 300% and more than that charged by the loans of the main fintech companies in the country.
In any case, despite the efforts of some public banks, the deterioration of purchasing power in recent years and the rise in interest rates to contain inflation affected credit cards: in 2022 purchases were made for $820,439.2 million, 11.6% less in real terms than last year, according to the BCRA
“In the last 4 or 5 years, especially from 2018 to now, banks began to be much more prudent when issuing cards. Administration expenses add to the costs, since the cards have a maximum rate, which that harms the issuance of new headlines”william barber
Along the same lines, the average volume of money used in credit card operations fell: while in June 2016 an average credit card consumption was $1,846 -measured in constant pesos of January 2019-, in June 2022 it had fallen to $1,581.
“In the last 4 or 5 years, especially from 2018 to now, banks began to be much more prudent when issuing cards. Administration expenses add to the costs, since the cards have a maximum rate, which which harms the issuance of new holders,” said Guillermo Barbero, partner at FIRST Corporate Finance Advisors.
The availability of funding that public banks have is what, for Barbero, “allows them to adequately finance a credit card system, especially when the credit rate begins to rise.”
“Currently, for the bank, if you use the card but do not pay interest, all the movement of the card is a cost, it is not an income,” he said, which partly explains the possibility of these entities to launch proposals towards sectors that historically have not accessed.
