Mexico and My Money: Why so few foreigners hold Mexican credit cards
According to a recent MND financial survey, only 20% of foreign residents in Mexico have acquired a Mexican credit card. But there are advantages, notes writer Dawn Stoner. The post Mexico and My Money: Why so few foreigners hold Mexican credit cards appeared first on Mexico News Daily
A recent survey conducted in Mexico revealed that while over 70% of respondents possess a local bank account, only 20% of them own a Mexican credit card. This significant gap between the prevalence of local bank accounts and Mexican credit cards prompts the question of why foreigners are reluctant to adopt this financial product in Mexico.
According to MND's recent financial survey, only about 20% of foreigners in Mexico have opted for a Mexican credit card. One possible reason for this phenomenon is that Mexican credit cards have high interest rates compared to those offered by foreign banks. Mexican banks charge higher interest rates on credit card purchases than banks in the United States and Canada.
For example, a recent study by Banxico, Mexico's central bank, found that standard Mexican credit cards have interest rates ranging from 60% to 85% annually, while entry-level or co-branded retail credit card rates can be as high as 100% to 125%. In contrast, the average interest rate for U.S. credit cards is 22%, and in Canada, it is around 20%.
Another factor contributing to the low usage of Mexican credit cards is the absence of legal limits on the interest rates banks can charge. In Mexico, banks can charge whatever they deem appropriate, leading to exorbitant fees and steep annual charges for late payments. Furthermore, Mexican credit cards often lack valuable perks offered by foreign credit cards, such as cash back on purchases, points that can be exchanged for cash, access to private airport lounges, and no annual fees or surcharges on purchases abroad.
Despite these drawbacks, there are certain situations where a Mexican credit card might be useful. For instance, individuals who no longer have a U.S. mailing address may find it difficult to obtain a credit card from major international banks in Mexico. In such cases, a Mexican bank could be a practical option. Similarly, those who frequently shop on Mexican e-commerce sites may find local credit cards more convenient, as many domestic companies have not considered this use case for foreign cards.
Written by urgent.news from Mexico News Daily's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
