By Wendy Anders

Costa Ricans significantly increased their credit card debt this year, and were also found to be victims of misleading special programs and promotions, said the Ministry of Economy, Industry and Commerce (MEIC) in a special report on credit cards.

The Ministry’s Consumer Support Division evaluated special programs offered by 12 credit card issuers and found that consumers are not provided with clear and accurate information.

Costa Ricans credit card debt stands at ¢1,005 billion (about US$184 million) as of October 2016, a 20 percent increase over October 2015. This represents 3.34 percent of the country’s gross domestic product.

In addition, the number of credit cards issued in the country increased 11 percent this year, and total 2,334,437 as of October 2016.

In their study, the ministry examined purchases made with installment plans offering free or low interest rates, and found “serious breaches that affect the rights of consumers.”

For instance, clear and accessible information about special promotions was routinely not given to customers. Rather than providing details regarding commissions or administrative charges, penalties for late payments, procedures for early balance payments, and other conditions that apply when such special credit lines are granted, clients were simply promised easy credit and told to contact the financial institution for more details, said the ministry

“Many consumers are not aware that a single late payment can cause all of the promotion’s benefits to be canceled and the entire amount of the debt due for immediate payment, which can make handling such a debt unmanageable for consumers,” said Welmer Ramos, Economy Minister.

A series of warnings have been issued to financial institutions offering such credit programs, and many have worked on correcting these problems or have committed to do so in the short term, said the Economy Ministry.

However, the MEIC will continue to ensure that adequate information is provided, and at the same time is undertaking a joint effort with banks to modify the country’s credit and debit card regulations.

The issuers included in the study were Bancrédito, BCT, Banco de Costa Rica, CrediSimán, Credix, Credomatic, Davivienda, Lafise, Banco Nacional, NovaScotia, Scotiabank and Promérica, said the Economy Ministry.

Credit cards in Costa Rica have very high interest rates with 80 percent of cards in local currency (colones) offering 40 to 50 percent rates, and for those in dollars, the majority offer a rate of 30 to 38 percent, said the MEIC.