Colombian cardholders are moving more each day with the monthly payment of their credit cards, among other financial obligations. Until last April they had arrears (more than 30 days) for more than 3.1 trillion pesos83 percent more than the balance in arrears registered a year ago.
This shot in late payments, which leaves the indicator for card arrears (8.45 percent) among the highest for consumer loans, It has the alerts turned on in the emitters of plastics that they are taking measures to stop this situation, which forces them to raise the provisions on that poor quality portfolio.
The figures are part of the most recent report on the financial system released this week by the superintendence of the branch, which also warns how in the last year the issuance of new credit cards has been slowing down, while cancellations and the temporary blockades of these are increasing, as a response to this situation.
At the cutoff last April, the number of active credit cards fell to about 15.7 million, from a peak of 16.2 million seen in October last year, which indicates that in six months some 500,000 plastics have left the market and about 400,000 if those active a year ago are taken into account.
It is not the only data that shows the bad moment that this banking business and the consumers themselves are going through.
In effect, banks have slowed down the pace of new card approvals. Of the nearly 417,000 who approved in April 2022, in the same month of this year only 210,199 were approved, that is, 49.6 percent less, but if you have the maximum approved in August of last year (445,313 plastics) the fall is close to 52.8 percent.
In addition to the above, since last year the number of cards that are temporarily blocked for various reasons, such as reports of loss, theft or damage to the plastic, but also due to non-payment of the fee, has also increased. monthly, a factor that covers most of these blockades, according to bank sources consulted.
In April of last year, the entities blocked about 2,087,000 units. Since then, there are more and more temporary blocks, to the point that in April 2023 that number covered 2,331,419 credit cards.
the bad time
High cost of living, unemployment levels (10.5 percent in May)The high interest rates, especially those of consumer credit, and the uncertainty regarding the evolution of the economy this year continue to take their toll on the pockets of consumers who already begins a verse in trouble to meet its financial obligations, among others.
The proof is that in Last year the total value of people’s overdue debts with banks totaled close to 31 trillion pesos until April and its real annual growth exceeded 18.7 percent, a dynamic that has not been observed since the end of 2020 and mid-2021.
Only overdue consumer loans, which include vehicle loans, payroll, credit cards and free investment, among others, shot up by more than 57.5 percent by the end of the fourth month of the year, reveals the Financial Superintendence this week, which also distinguished that only in this segment the ‘hanging’ debts are around 15.5 trillion pesos, of which those of the cards represent a fifth.
The problem, some analysts have warned, is that this trend brought about by the system’s bad portfolio will continue given the weak prospects for the economy for the second half of 2023.
With the increases in the rates of bank loans, including consumer loans, Colombians have demanded fewer loans, which has gradually slowed down the growth of the portfolio, which after 23 months in positive territory, last April fell by 2 .8 percent, say the analysts of the Davivienda Group, who the quality indicator of the consumer portfolio for that month (7.26 percent) is the worst since November 2009.
Under this scenario and after the relaxation last year in which consumption skyrocketed, only spending with credit cards reached the historical figure of 108.6 trillion pesos, this 2023 the squeeze will be quite severe.
Analysts from Grupo Bancolombia point out that: “So far this year, our data on purchases made by Bancolombia cardholders reflect a slowdown in purchase levels, which is largely due to price increases, upward adjustments in interest rates and the decline in consumer confidence. Therefore, by 2023 we expect lower growth in consumption”.
This is corroborated by the most recent figures from the Banco de la República, which indicate that credit card disbursements decreased at a real annual rate of 7.9 percent during May.
Cash advances also did so, although to a lesser extent (4.1 percent). And although deferring payments for more than one installment was the common name in the past, today one-month consumption is still growing at a rate of 3 .2 percent, “evidencing the preference of cardholders for the shortest credit term, which rule does not imply the payment of interest for the consumer”, say the Davivienda economists, who also consider that “with these results complete three consecutive months of annual decrease in credit card disbursements”.
