Bancolombia surprised the market by announcing to lower the interest rate for purchases with its credit cards from Friday.
Reduced from 46% to 25% of the effective annual rate for Visa Clásica, Mastercard Clásica, American Express Blue, Mastercard Joven and MasterCard Ideal credit cards for customers with quotas up to $3.9 million.
This measure, which will benefit 1.3 million cards, representing 50% of the total Bancolombia manages, applies to those who already owned the products and to those who acquire them, upon approval of the respective credit study.
In the Caribbean there are 172,572 credit cards that benefit from a lower rate.
“With this measure, we are initially seeking to guide a segment of customers who may see their homes and day-to-day economies more affected at a time of inflation and challenging conditions,” the entity said.
Bancolombia’s president, Juan Carlos Mora, pointed out that the decision is aimed at the financial well-being of its clients.
How the rate applies
Bancolombia explains that when an individual finances a purchase, the interest rate applied is that of the day of purchase. In this case, an annual effective interest rate of 25% will apply from March 10, which translates into a nominal monthly arrears of 1.88%.
He also announced that in the bank’s Virtual People Branch, there is the option to change the number of installments on the purchases they make, as a measure to ease cash flow pressure from month to month.
In addition, customers have the option ‘Alternative minimum payment’ so that they are aware of their minimum obligations with this option.
“Of course, the current economic situation may increase overdue portfolio indicators on cards and other credit products. It is an indicator that we constantly monitor and that challenges us to find new strategies so that our clients have a stable and healthy portfolio,” the entity said, calling for a very responsible approach to consumption despite the lower rates.
Other banks are considering lowering rates
On this subject, the president of BBVA Colombia, Mario Pardo, assured that the country is expected to pass the peak of inflation and interest rates, which is why they will fall in the coming months, especially in credit cards.
He stressed that the average BBVA credit card take-up rate was 30% as of February.
Davivienda, in turn, is also studying the possibility of a tariff reduction.
more competition
The dean of the Faculty of Economics of the Externado de Colombia University, Juan Pablo Herrera, said Bancolombia’s decision is disruptive, but also creates increasingly competitive space in the financial sector.
“In an environment where the usury rate is 46.26%, this mechanism relieves household burden and stimulates demand, creating positive consumption dynamics,” he added.
The Bank of the Republic has been raising monetary policy rates for several months as a measure to reduce inflation by discouraging consumption and to date it stands at 12.75%.
Source: El heraldo
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
