|DR1.com - El Dia reports today on the high costs of credit card financing in the DR. For instance, some cards charge up to 96% in annual interest. El Dia reports that this can be four times the average interest on a personal loan (22.5%), seven times interest on a mortgage (12.95%) and five times as much as the interest for financing vehicles (20.5%). |
Julio Cesar Munoz, director of the User Protection Department at the Superintendence of Banks (Prousuarios) said that if a credit card charges 7% monthly interest, that means purchases pay RD$23 per RD$10,000. This means, that a RD$10,000 purchase will have accumulated RD$644 in interest 28 days later. The amount is exonerated if the person pays on time (normally 20-22 days after the cut-off). But if paying after that date, then the RD$644 plus the debt will be charged.
The Superintendence of Banks has said that users would only pay interest rates on the pending balance of a debt, but in practice, banks continue to charge the full amount of the interest accrued, whether or not partial payments were made on the debt.
El Dia reports that Others charge up to RD$2,600 to issue a card, and 5% for cash advances in an ATM. Others charge up to RD$2,600 to issue a card, and 5% for cash advances in an ATM.