Wednesday 25 May 2022

Central Bank defines maximum interest rate for credit cards

37% for colones and 30% for dollars is the maximum interest rate established for credit cards

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25 May 2022 - At The Banks - BCCR

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(QCOSTARICA) The Banco Central de Costa Rica (Central Bank) published early Friday morning the maximum interest rates for credit operations in colones, dollars, and other currencies, in accordance with the new Ley de Usura – usury law – now in effect.

Through a press release, the Central Bank announced that the maximum interest rate for all types of credit (including credit cards but excepting microcredits) will be 37.69% for colones and 30.36% for U.S. dollars.

For other currencies, ie euros, the rate maximum rate is 7.44%.

From El Financiero, banks with credit card products and interest rates. Column in red the number of credit card products over the usury law
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For microcredits (less than ¢675,000 colones), the maximum interest rate will be 53.18% in colones and 42.99% in U.S. dollars.

The usury law enacted last month obliges the Central Bank to update the usury rates in July and January of each year.

Charing interest rates higher than those established by the BCCR will be considered usury for the purposes of the Penal Code.

Important to note that the usury law is not retroactive, only applies to future credits. According to the credit card study by the Ministry of Economy, Industry and Commerce (MEIC), almost 70% of credit cards in the country have interest rates of over 39%.

Also important to note, that usury law prohibits automatic deductions from a worker’s salary that affects minimum wage.

On Thursday, the private bank BAC announced the cancellation of some 187,000 credit cards, the closure of 11 points of service and the layoff of 373 employees, and the reorganizing of its credit product line, citing the usury law as the reason.

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