Monday, January 30, 2023

56% of credit cards in the DR have a limit of less than RD$50,000

Credit cards are an important tool for many people, especially when they are in financial trouble or need to cover certain basic needs and pay in the short term. However, in a country where the average salary of formal workers does not exceed RD$30,000, it would be thought that the limit amount in this instrument would be concentrated in those lower than RD$15,000.

The reality is different. 56.7% of current and active credit cards in the Dominican Republic as of November 2022 did not exceed an approved limit of RD$50,000, when grouping the authorized ranges. While 38.7% does not exceed RD$25,000 per month.

According to Central Bank statistics, at the period under analysis there were 2,929,869 valid and active credit cards, 9.7% more than in November 2021. Of this total, 22.7% (667,113) had a limit of up to RD$10,000; 5.8% (172,458) from RD$10,001 to RD$15,000; 10% (295,901) from RD$15,001 to RD$25,000.

This last approved limit amount may be due to the fact that 38.2% of formal workers earn an average monthly salary below RD$25,215, according to data from last August from the Social Security Treasury (TSS).

Although Carlos Vallejo, a private employee who receives a higher than average income, prefers to have a credit card with a limit below his salary so as not to incur unnecessary expenses.

“I have one for RD$5,000, which was the amount that the bank approved for being my first credit card, but I would like it to be around half of my salary,” he explained to the money.

Likewise, Rosa de la Cruz has, since 2021, a card with an approved limit of RD$25,000, but plans to increase the amount.

“The bank is offering me a higher amount because I have good management and I am thinking of taking it,” he said. However, there are other users who opt for an amount greater than their monthly income. Such is the case of María Mendoza, a young married woman who has a credit card worth RD$40,000 and US$1,000.

The use you have with said card is for fixed expenses. He has another for RD$19,000 and US$150.00, which he uses to make purchases at the supermarket. He comments that he has these instruments as a form of “prevention” rather than constant use.

In the country, 17.9% (527,186 cards) of the users of this “plastic” can finance their purchases of products and services for an amount of RD$25,001 up to RD$50,000, according to data from the monetary body.

While 12.9%, equivalent to 379,359 active cards, correspond to amounts ranging from RD$50,001 to RD$75,000; 7.8% (230,441) from RD$75,001 to RD$100,000.

Meanwhile, 4.6% (137,560) of the current and active credit cards in November 2022 were from RD$100,001 to RD$125,000. While 2.9% (86,061) corresponded to amounts from RD$125,001 to RD$150,000.

With RD$150,001 and more than the credit limit, there were 433,790 valid and active cards, occupying 14.8% of the general total.

Internet payments

As of last November, in the country transactions with cards not present (via the Internet) reached 23,231,635, for a value of RD$57,496.4 million, of which RD$45,443.1 million, equivalent to 79.03% of the total transacted, were with credit cards.

Meanwhile, debit cards had transactions via the Internet for a volume of 10,596,395 (RD$12,043.6 million). While the prepaid cards had a volume of 8,574 for a value of RD$9.7 million.

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