Credit Card Direct Payments: 3 Benefits & 1 Risk | YOUR-MONEY
- A growing number of Peruvians are relying on credit card installment plans, even as overall credit card financing remains stagnant, according to recent analysis. This trend is driven...
- "It is no small thing that you can take advantage of the benefits, miles, points adn cashback that the cards offer," explained an expert.
- READ ALSO Yape accelerates operations, but Interbank counterattacks, what is it's massive strategy?
Peruvian Credit Card Use Shifts: Rise in Installment Plans Despite Economic Concerns
A growing number of Peruvians are relying on credit card installment plans, even as overall credit card financing remains stagnant, according to recent analysis. This trend is driven by a segment of consumers who comfortably repay balances in full, leveraging card benefits, alongside a more vulnerable group susceptible to debt issues.
“It is no small thing that you can take advantage of the benefits, miles, points adn cashback that the cards offer,” explained an expert. These customers avoid interest charges by making “full payment” each month.
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Data from the Central Reserve Bank (BCR) shows credit card financing in Peru experienced a minimal annual variation, decreasing 0.8% in the first half of the year. A slight recovery was observed in the third quarter, with a 5.6% increase.
The moderate pace of Peru’s economic recovery is also a key factor. “Behind people’s debt decisions is the growth of GDP; when the country improves, employment and salaries grow and there is a lower probability of non-payment,” stated the expert.
however, concerns remain. ”But we still do not see a buoyant economy, nor a generalized reactivation; without that scenario, misuse could cause problems among credit card debtors,” he added.
The majority (70%) is made by dividing purchases into installments.
Installment Plans Dominate Card Spending
While 30% of credit card transactions are made with immediate payment, a critically important 70% involve dividing purchases into installments, incurring interest charges.
“there are two subgroups,” explained the expert from the University of Piura. “There is the premium or signature customer, who has benefits and special products, who, although they make purchases with immediate payments, also divide large amounts, for example travel, into installments.”
“There is also the client from lower socioeconomic segments, who uses the card for consumer expenses, buys clothes or things on credit, begins to carousel the money and that is where their problems begin,” he warned.
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