If your bank cut your credit limit, you should know that you are not the only one. Recently, banking institutions such as Citibanamex, Banorte and BBVA announced to their clients adjustments in credit provisions, a strategy that seeks to avoid overindebtedness and late payment. Read Can I go to jail for owing the bank?
“The credit areas of the banks are seeing a potential drop in past due loans due to everything that is happening due to the drop in economic activity derived from the Covid-19, and they are cutting credit lines, thereby seeking to reduce the risk they have towards the cards “, explained Luis Roberto Arechederra, managing partner of Bursar Analysis.
In normal seasons, past-due loan ratios are between 2.5 and 3 percent, but with the crisis, they can skyrocket up to 10 percent, he added. He noted that in some institutions, the cut was to clients who entered the contingency payment deferral program. However, they can also do it with other cardholders.
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In recent days, Julio Carranza, vice president of the Association of Banks of Mexico and general director of Bancoppel, explained that these actions correspond to the analysis that the institutions make of the payment capacity of their users; Depending on the situation, the available line can be reduced by up to 50 percent.
“It is a natural reaction of banks, although some people are probably feeling it as excessive or unjustified because they do not have any payment problem. All this is handled through algorithms, so the procedure to justify case by case is not exact. reductions, “said Joaquín Gándara, former president of the Mexican Institute of Finance Executives (IMEF).
They define certain risk patterns, certain consumption patterns, that make them make massive reductions. “
Some institutions like Citibanamex also banned cash provisions with a credit card, with the same objective.
“This measure was implemented to take care of the financial health of our clients and avoid over-indebtedness. According to internal risk criteria, it applies only to certain clients,” the bank stated.
Arechederra explained that it is because the disposition of cash is considered in banking algorithms as a high percentage of increased risk. “So in situations like the one we are experiencing, they block access,” he said.
They stressed that banks are empowered to change credit conditions, a clause included in most contracts.
Therefore, they recommended to those affected to approach to negotiate. “Surely they will ask for some vouchers or requirements, and if it is justified the bank will surely proceed to reinstate (the previous limit),” said Gándara.