DistantNews
Support us
Credit card delinquency reaches 8.5%, highest in banking system
🇵🇦 Panama /Economy & Trade

Credit card delinquency reaches 8.5%, highest in banking system

From TVN Panamá · () Spanish

Translated from Spanish, summarized and contextualized by DistantNews.

At a glance

News Sources not specified Outcome reported
  • Credit card delinquency in Panama reached 8.5% by the end of May 2026, the highest rate within the banking system.
  • Economists attribute this rise to unemployment, increased cost of living, and the use of credit cards for basic necessities.
  • Experts urge strengthening financial education and promoting responsible debt management.

Credit cards have become the riskiest product in Panama's banking system, with delinquency rates soaring to 8.5% by the end of May 2026. The total credit card portfolio exceeded $3 billion, yet this high rate of non-payment signals significant financial strain on consumers.

When incomes are insufficient, families prioritize essential expenses like food, transportation, and basic services, relegating debt payments. Then many people leave the credit card, it is not the basic or fundamental thing to pay, but to pay what is necessary, food which is rising, transportation. So those people let the credit card accumulate.

— Rolando GordónAn economist explains how rising costs and low incomes lead to credit card debt.

Economists, including Rolando Gordón, dean of the Faculty of Economics at the University of Panama, link the escalating delinquency to widespread unemployment and the rising cost of living. Gordón explained that as people lose jobs, their ability to pay off credit card debt diminishes, forcing them to prioritize essential expenses like food and transportation over loan obligations.

"When incomes are insufficient, families prioritize essential expenses like food, transportation, and basic services, relegating debt payments," Gordón stated. He added that many individuals resort to using credit cards to cover daily expenses due to insufficient salaries, a situation exacerbated by the increasing cost of living.

Credit card: it should be used solely and exclusively in moments of emergency. But you cannot be using the credit card to buy food, to buy luxury goods.

— Rolando GordónAn economist advises on the proper use of credit cards.

Experts emphasize that credit cards should be reserved for emergencies, not for routine spending. However, the current economic reality compels many to use them for everyday needs. The high delinquency rate highlights the urgent need for enhanced financial education and responsible borrowing practices to mitigate future economic pressures on households.

But many do it because they don't have enough. Remember that this is a country that no matter how much you look at it, salaries are low.

— Rolando GordónAn economist acknowledges the economic pressures forcing people to use credit cards for daily expenses.
DistantNews Editorial

Originally published by TVN Panamá in Spanish. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

More Stories

From Our Blog