Credit card purchases this month will be the most expensive in five years

But the situation began to change from the end of 2021, when as the economies and markets normalized, the usury rate also rose again, going from 25.62% in October of last year to 33.32% in this August.

Thus, this increase has had a direct impact on credit cards, one of the products that leverages the consumption of Colombian households and works as a backup in the face of sudden day-to-day emergencies. In that order of ideas, the increase in usury, which is the maximum interest that a financial entity may charge its clients for consumer and ordinary credit, such as credit cards, will lead banks to raise this interest, which that will hit consumption, affecting the household economy.

Although the banks have not yet adjusted their rates, given that the SFC published the August usury last Friday, the entities that had the lowest annual effective interest rates (EA), that is, those that were farthest from the current indicator in July, they were: GNB Sudameris, Banco Caja Social, Finandina, Serfinanza and Davivienda, with 27.87%, 29.84%, 30.46%, 31.42% and 31.68%, respectively.

In the next few days, banks will make their respective adjustments and raise interest rates.

“With the global and internal environment, the usury rate will continue to rise, there is no fact that allows not to do so. This rise will impact the consumer portfolio. Users of the financial system with credits at variable rates will suffer this increase”, commented Wilson Triana, an expert in banking.

However, and despite the increases that will continue to occur, for many Colombians the use of credit cards is an essential part of their economy, since being a massive and easy-to-use means of payment at the time of need, many People will continue to use this mechanism, so experts recommend caution.

For Alexander Ríos, financial expert and founder of Inverxia, when rates rise, long-term debt at high interest rates must be avoided.

“The recommendation is that if the credit card is going to be used, two things should be checked: first, that it provides points, miles or other types of benefits, because that will later represent a discount. And second, finance one or two installments, where the interest charge does not represent a large proportion of the payment for purchases, “said Ríos.

Commission for credit card advances

Credit card advances are a financial product that allows people to release a percentage of their plastic quota in cash. However, this action generates additional charges, which depend on each entity, whether the withdrawal is made at an ATM of the same bank or another network. According to data reported by the Financial Superintendence of Colombia (SFC), Banco Caja Social, Bancoomeva, Banco Popular and Falabella do not charge for advances in ATMs of the same entity, but if it is done in another network they have charges between $5,750 and $5,650.

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