According to a report by the Córdoba Ombudsman, 90.2% of Cordoba households had to resort to debt in the last year to be able to meet their essential expenses and consumption. It is 78.4% through formal means and 53.8% through informal means. As they explained, the most massive financing instrument is the credit card. 78.1% of households have at least one credit card. In the last year, 69.6% have made purchases in installments using this means of payment.
“In the current situation, in many of these cases the use of a credit card becomes a financial risk factor, as when the total payment of the statement cannot be afforded and another debt is incurred. It is so 30.9% admits that in the last year have requested loans or credits to pay a previous debtas is the credit card balance”, indicates the analysis.
In descending order, the formal sources of financing mentioned by 78.4% are personal credit, single signature credit, microcredit, mortgage credit and pledge credit. On the other hand, of the 53.8% who expressed that they resort to informal means of indebtedness, they used the Loans from family or friends, also from employers, and purchases on credit.
For the analysis of the Ombudsman’s Office, “The destination of the new debt is another factor that sets off alarms. In addition to paying debts with a credit card, the second most mentioned reason is the payment of taxes, services, expenses and rent. Everything indicates that the dynamics occurs in order to avoid, in the short term, consequences such as the cut off of services, evictions, etc.”they explained.
“This is followed by another worrisome usewhich is the access to food and medicine. In the last year the 19.8% went into debt to be able to acquire this type of goods and daily and essential supplies. A slightly smaller proportion (19.1%) did it to pay for home or car repairs“, indicate.
28.1% are late in paying their credit card. 16.1% owe one or more household utility bills (water, electricity, gas). 13.5% owe bank credit installments. A similar percentage has debts from purchases on credit. 9.1% are behind in rent payments and 8.5% in expenses. Other debts are with service companies, such as telephone and internet, college / university fees and prepaid medical companies.
Regardless of the destination for which the debt is contracted, in the last year the most used forms of financing are the purchase in installments with a credit card (69.6%), loans from family or friends (42.1%), bank loans (30.9%), employer loans (14.4%) and purchases on credit (12.4%).