- Category: Business
- Published on Sunday, February 12 2012 03:30
- Written by Rod Hughes
- Hits: 516
Despite reports that Costa Rican consumers are ramping up their credit card use, the Ministry of the Economy also reports that lateness in payment fell 19% between July and October of last year.
Credit card use is still below that of developed nations such as the United States, but the drop in late payments was interpreted here as an indicator that the economy is improving.
In the 90 days covered by the report, consumers incurred some 30.7 billion colones of debt but by October had reduced this to 24.8 billion. Of course, this did not cover the holiday buying spree at the end of last year.
"This decline (in late payments) happened despite a rise in overall indebtedness and as there are a larger number of credit cards in circulation," said Guisela Chaves, director of Economic Studies at the Ministry.
Fernanado Naranjo, president of Banco Nacional, is certain that the drop in late payments was due to an overall improvement in the economy. "An important improvement in the economy allowed allowed families to better pay their credit card debt," he said.
The total amount of debt for October, 2011, may be contrasted with the debt of a year before, 20 billion colones. But despite the increase in credit card use, Costa Rican families still pay only 4.4% of their consumption by credit cards.
Generally, it indicates a more measured use of credit compared with the United States where one sometimes earns a suspicious look from the cashier in a grocery store by paying with cash, as if one's money might be counterfeit.