Credit cards: how much does the cost of refinancing balances go up

Last week the central bank (BCRA) made a first nod to the IMF and decided to increase its reference rate, which went from 38% to 40%. The measure had a positive impact on the yields of time deposits, but also increased credit costs.

In particular, it affects two credit rates that were regulated by the BCRA:

I also read: What is the reference rate and how does it impact the economy?

  • The cost of refinancing the credit card balances.
  • The rate of some of the lines of Subsidized loans for MSMEs.

Several banks consulted by TN they recognized that they are studying how they will implement the rate hike that the BCRA authorized. Some are already reporting the increases to customers.

How much will it cost to refinance credit card

Since 2020 the BCRA has been limiting the rate that banks They can charge customers to refinance balances owed on credit cards.

This operation, which in financial jargon is known as revolving, is used by about 40% of plastic holders. They are those who do not manage to pay the total of the summary and make a partial deposit, either the minimum or something else, and refinance the rest.

The Central Bank raised the reference rate to 40%.  (Photo: NA).
The Central Bank raised the reference rate to 40%. (Photo: NA).

For a year, the BCRA had established that the rate to refinance balances of up to $200,000 had a nominal annual cap of 43%.

From the communication that raised the reference rate, meanwhile, that maximum cost rose six points to 49% to finance those same amounts.

The increase can take effect from January billing, but the banks will have to communicate to their clients about the change in costs.

I also read: Before the rise in rates, fixed terms accumulated three months in decline

When the balance to be refinanced exceed $200,000, The compensatory interest rate may not exceed the rate resulting from the average cost that the bank has applied to the personal loans granted in the previous month by more than 25%.

The cost of subsidized loans rises

In the midst of a pandemic, the BCRA relaunched the productive investment lines, with subsidized rates for MSMEs and health companies, among other items.

Due to the rise in BCRA rates, the cost of credit cards and loans increased

Until now, the maximum cost that banks could apply to these loans was 35% annual nominal rate, now that maximum rate rose to 41% in the following cases:

  • When it comes to financing working capital and check discount deferred payment and factions of electronic credit mipyme.
  • If the credit is granted to companies of any size whose main activity is to lend health-related services or use the funds to acquire machinery and equipment produced by mipymes Argentines.

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Helen Hernandez is our best writer. Helen writes about social news and celebrity gossip. She loves watching movies since childhood. Email: Phone : +1 281-333-2229

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