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In the framework of the heavy expenses that Christmas and holidays imply, in 2019 65% of Chileans affirmed that they went into debt to pay for them, preferentially using bank and multi-store credit cards. But for this year, that number registered a significant drop.
That’s what a new study from Chiledeudas.cl, which states that now the number of Chileans who are borrowing to pay for the period’s expenses dropped to 50%, which represents a significant drop compared to the previous 65%.
Guillermo Figueroa, Chiledeudas.cl “This change is influenced by the coronavirus crisis, given that the population will use their money withdrawn from pension funds to a greater extent to pay for year-end expenses. Bonds delivered to more vulnerable groups, which are of utility for this season. And also, due to sanitary restrictions, people are behaving in a more conservative way in terms of indebtedness, waiting for how the covid-19 will continue to evolve “, explains the director of Chiledeudas.cl, the commercial engineer Guillermo Figueroa.
The study specifies that of the total number of people who will receive Christmas bonus this year, 60% will use it to pay for end-of-year expenses, 20% will use it to pay debts and the remaining 20% will go to basic aspects such as food and clothing.
The responsible debt expert adds that “Considering that 50% of Chileans will go into debt to pay Christmas and vacation expenses, of this total the majority are taking smaller loans, not exceeding one million pesos, when a year ago they averaged two million.”
Likewise, the study of Chiledeudas.cl reveals that 60% of those who are opting for the path of indebtedness do so through banks, while the remaining 40% do so in multi-stores, where the credit card is the protagonist.
The commercial engineer makes a call not to use cash advances, which are the most expensive financial product on the market, and to compare between entities, fundamentally analyzing the CAE, which is the Equivalent Annual Charge, that is, the total cost of the loans .
“The decline in the taking of credits for special seasons such as Christmas and holidays, although in this case its main reason is the coronavirus crisis, it is a trend that could continue over time, as the population will remain more conservative in economic terms as long as sanitary restrictions continue. Let us remember that financial obligations should not exceed 50% of monthly income to be manageable “, emphasizes Guillermo Figueroa.
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