Argentine credit card debt climbs, young adults most affected

Credit card debt is a growing concern for Argentines, with high interest rates making it difficult to clear balances, especially when payments are delayed. A report by consultancy Analytica indicates that over five million Argentines are more than three months behind on their credit payments. This widespread delinquency affects nearly three out of ten individuals with financial debt, exacerbated by a deteriorating job market and lagging incomes in some population segments.

The situation is particularly acute for young Argentines aged 18 to 30, where delinquency rates approach 40%, the highest among all age groups. To combat this, financial experts recommend a proactive approach to debt management. Pablo Lazzati, CEO of Insider Finance, stresses the importance of progressively reducing the principal owed each month, as interest accrues on ever-larger balances, making the debt difficult to reverse.

Both Lazzati and Pedro Piñeiroa, head of Payments at Banco Galicia, advise against making only the minimum payment. Whenever possible, paying more than the minimum, or the full balance, significantly reduces the principal, lowers future interest, and speeds up financial recovery. Piñeiroa notes that paying the minimum is only advisable to avoid late fees and card suspension. He also suggests that intermediate payments, between the minimum and the total, help reduce the financed balance and associated interest.

Financial experts also point to tools like installment plans for credit card balances and adjusting payment due dates to align with salary collection. Adopting healthy financial habits, such as tracking income and expenses, avoiding impulse buys, and using credit cards as a payment method rather than an income extension, are crucial for maintaining financial equilibrium and preventing overdue payments.