Mexico City. In Mexico, six out of 10 people who have debts are over-indebted, meaning that their financing limit is exceeded and their income is not enough to cover the balance of their repayments, according to a new study by Bravo.
According to the report Debts of Mexicans: reasons, solutions and challenges, credit cards or department store cards, as well as personal financing are the main means by which people get into debt, and the average debt balance is 173 thousand 131 pesos.
Diego Paillés, regional director of Bravo, indicated in a press conference that it has been detected that one of the main reasons why people fall into a situation of over-indebtedness is that they only make the minimum payments of their monthly payments, until they reach a point where consumers only pay interest and not capital.
According to the firm, of a universe of 22 million 900 thousand credit cards in the country at the end of June of this year, whose balance is 435 thousand 400 million pesos, 58.3 percent of its account holders pay the full amount of their monthly payment and 41.7 percent are not considered “totaleras.”
Of the latter, 74.4 percent usually pay more than the minimum amount required by the institution to which they owe money, and 25.6 percent only make the minimum payment.
The profile of debtors
The study separates the profile of debtors into men and women. On the female side, they are on average between 31 and 45 years old and half are single; six out of 10 have a bachelor’s degree and have up to three debts with some institution or company. Their average debt is 161 thousand 448 pesos and their monthly income is 18 thousand 244 pesos.
59 percent believe that the cause of their debt is because they are over-leveraged, 20 percent attribute it to a reduction in their income, 10 percent to job loss, five percent to illness, and the rest is divided between accidents, divorces, business bankruptcy, among others.
In the case of men, the average age of those in debt is between 26 and 35 years old; 43 percent are married and 59 percent have completed a bachelor’s degree. Their average debt is 184,814 pesos and their gross monthly income is 24,422 pesos. They have up to three debts.
Thus, 60 percent of men say that the cause of their debt is over-leveraging, 20 percent attribute it to a decrease in their income, 10 percent to job loss, seven percent do not specify, and three percent to suffering from some illness.
According to Bravo, the main reason why people in Mexico acquire debt is for an emergency of any kind, followed by medical expenses or home repairs, then education, the purchase of goods and finally for vacations or to treat themselves.
According to Bravo, half of the people who currently have debts acquired their first financing between the ages of 19 and 24, and it was the credit card from the bank through which they were provided with a payroll that was the means by which they leveraged themselves.
This company works as a restructuring company, that is, a person in debt goes to them to be provided with a loan with which they can settle their debts with banks, fintechs or department stores, etc., and only stay with one, theirs.
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– 2024-09-06 00:34:07
