Argentine Credit Card System

[NoVegetables]

Hi,

This may sound like a really silly question but i don't understand how the credit card system works here.

In the States its pretty straight forward,
- you apply directly to one of the card companies,
- you get a card with a predefined limit,
- you buy something using the card,
- you you repay the card company any amount you want above the minimum required payment
- if you don't pay the full balance they charge you interest on the remaining balance.

Here none on my friends have a credit card and i get conflicting story about how its supposed to work.
-Can someone explain the process?
-Do you really have to apply through a bank and can't do it through a card company directly?
-What are quotas, and how does that repayment system work?

 

[estebandepraga]

its a dark holw which sucks you up
I had one years ago and gave it back
its good if you buy big items for thousands of pesos and they have 12 cuotas sin interes but read all the fine lines!

 

[NoVegetables]

buy big items for thousands of pesos and they have 12 cuotas sin interes but read all the fine lines!

What does that mean? I don't get the 12 cuotas sin interes part. Whats a cuota?

 

[MDZ]

- you apply directly to one of the card companies,
[...]
-Do you really have to apply through a bank and can't do it through a card company directly?

I am no banking expert but isn't what you describe as "card company" just a bank issuing a credit card?

 

[wongjoh]

(from about.com)
Definition: A credit card issuer is a bank or credit union who offers credit cards. The credit card issuer makes the credit limit available to cardholders and is responsible for sending payments to merchants for purchases made with credit cards from that bank. Credit card issuers are also called member banks. Chase and Citi are examples of credit card issuers.
Credit card issuers can't issue credit cards all by themselves, they need the help of payment processing networks like Visa and MasterCard. However, American Express and Discover act as both the credit card issuers and the payment processing network.
---
So, it seems that here in Argentina, Amex/Visa/MasterCard/Diners can´t act as credit card issuers, only as the payment processing network. Only the Argentinian banks act as credit card issuers so you deal directly with them.
"Cuotas" are just installments. They are not common in the US, but quite common in other parts of the world such as Southeast Asia and other places in South America.

 

[MDZ]

its good if you buy big items for thousands of pesos and they have 12 cuotas sin interes but read all the fine lines!

The other advantage is the discounts you get with the various cards based on special offers by stores. Some stores/malls have certain days where you get a discount with a certain card. But as estaban wrote always read the fine print and do the math before buying. Sometimes the discount requires a certain amount of "cuotas"/installments.

 

[PhilipDT]

(from about.com)
Definition: A credit card issuer is a bank or credit union who offers credit cards. The credit card issuer makes the credit limit available to cardholders and is responsible for sending payments to merchants for purchases made with credit cards from that bank. Credit card issuers are also called member banks. Chase and Citi are examples of credit card issuers.
Credit card issuers can't issue credit cards all by themselves, they need the help of payment processing networks like Visa and MasterCard. However, American Express and Discover act as both the credit card issuers and the payment processing network.
---
So, it seems that here in Argentina, Amex/Visa/MasterCard/Diners can´t act as credit card issuers, only as the payment processing network. Only the Argentinian banks act as credit card issuers so you deal directly with them.
"Cuotas" are just installments. They are not common in the US, but quite common in other parts of the world such as Southeast Asia and other places in South America.

American Express issues their own cards. Here and abroad.

 

[TomAtAlki]

No credit cards unless you have a local bank account and even then you may only get a debit card ( which we have). For many years now each time we ask for a credit card the answer is impossible.
Nancy

 

[ben]

Took a while to understand why everyone is so desperate to pay in cuotas, it turns out it's basically a hedge against (or indeed a bet on) inflation and the devaluation of the peso.

The logic being that one would much rather be paying installments the same amount of pesos in 6 months' time, when the dollar may well be 15 pesos and salaries/prices will have adjusted, than the whole thing now.

Businesses make these deals with banks and/or credit card companies because offering this is often a requirement to sell successfully.

 

[Davidglen77]

Credit cards here work exactly the same as they do in the US, however they are not as easy to get, which I don't think is necessarily such a bad idea. Here you have to demonstrate proveable income over a certain period of time (usually 2 years), as well as proof of address and payment of some other type of utility bills, in order to get one.
I knew so many people in the US who were over extended on their credit cards that by paying the minimum payment they would not even be making a dent in the payment of the original debt and with the rate of interest being levied on the account, the actual balance would increase every month, leaving them even deeper in the credit hole. This is an usury lending practice and should not be permitted.
The pitfalls with credit cards here are: 1) Some banks charge an "annual renewal" fee which can be hefty ($600 pesos), just to keep the account each year. 2) Some banks charge a monthly fee for "emisión de resumen" which is a monthly fee ($20-$30 pesos) just for them to issue a statement each month, and this is charged whether you get an electronic statement or a paper one sent by mail. This is where you have to be careful with because if you get a discount let's say for paying by credit card in 12 cuotas, and t's $200 pesos off the price of the item, you will end up paying (if they charge $30 each month for the statement) $360 just in fees, so using the 12 cuotas ends up costing you more (due to fees) than paying upfront for the item. 3) Some banks charge a "maintenance fee" just to keep the credit card account open, above and beyond maintenance fee charged for the savings / checking account you are required to keep open at the bank who issues the card.
This is one place where you should VERY CAREFULLY analyze the cardholder agreement before you decide to sign up for the card, and yes, compare banks also. Make sure you know what their fees are, here they can be VERY steep!
Banks to avoid: Banco Patagonia & Citibank - both banks charge fees for every move you make and have lousy customer service