Beautiful Virgin Islands

Sunday, Jul 06, 2025

Venezuelans say credit cards that were once lifeline now 'useless'

Venezuelans say credit cards that were once lifeline now 'useless'

Credit cards are becoming increasingly useless in Venezuela because of high inflation and government restrictions, hurting people already struggling to meet daily needs on low salaries, banking industry sources, analysts and consumers said.
The country's government imposed strict lending requirements during Venezuela's economic collapse - allowing banks to lend a maximum of 27% of their cash flow - sending local business owners abroad to seek loans.

And though the government of President Nicolas Maduro loosened currency controls in 2019 and let local banks open dollar-denominated accounts, many credit restrictions remain.

"They are useless," administrator Lina Pereira, from the central city of Valencia, said of her two credit cards, which both have low limits. "My parents bought appliances and computers with their credit cards, but that's a memory for Venezuelans."

As incomes have fallen and living costs have grown, credit cards have become vital for many people to make everyday purchases in supermarkets and pharmacies, even as credit limits stagnate and some banks eliminate the cards altogether.

"The banks don't have a way to lend and we need these credits," 36-year-old Pereira said, adding the total limit on her cards is now $2 a month, so low she can no longer use them to buy food like she did a year ago.

Cards accounted for just 2% - equivalent to some $16 million - of the credit portfolio of Venezuelan banks at the end of December 2022, according to the country's banking superintendency.

In 2012 that figure was 12% in Venezuela, while in countries like the Dominican Republic and Bolivia credit cards currently account for 5% of banks' credit portfolios, according to those country's regulators.

"Hyperinflation and the regulations have ended consumer credit," said one Venezuelan banking executive, who asked to remain anonymous for security reasons. "This kind of financing has stopped being a business for banks. The bolivars that they can put toward credit are going to other sectors" like businesses.

Although some local credit cards have higher limits of between $30 and $100 they still fall short - the average monthly cost of feeding a family was some $370 in December, according to the independent Venezuelan Finance Observatory.

"Consumer credit is what gets punished. It's the least likely to be given out," said economist Luis Arturo Barcenas, of analyst firm Ecoanalitica. "Often these credits weren't just for buying appliances, but also for day-to-day expenses."

Maduro's government has taken multiple steps to lower inflation by increasing the supply of foreign cash, limiting credit, reducing public spending and raising taxes.

As part of those efforts, the central bank ordered financial institutions to freeze 73% of deposits at the bank.

"If there aren't sufficient resources you can't give that much credit," said another bank executive.

Despite the measures, prices ticked up at the end of 2022, taking annual inflation to 234%.

In January Maduro urged banks to give businesses loans indexed to the exchange rate so they can "produce goods, riches" but he did not mention other loans or consumer credit.

Neither the central bank nor the banking regulator responded to requests for comment.

"With the limit on cards you can't even pay for lunch," said Gregorio Afonso, a 53-year-old university professor who has two local credit cards and an income of $20 monthly. "We've been in free fall since 2013 without credit, without social protection and working multiple jobs."
Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
London Stock Exchange Faces Historic Low in Initial Public Offerings
A new online platform has emerged in the United Kingdom, specifically targeting Muslim men seeking virgin brides
Trump Celebrates Independence Day with B-2 Flyover and Signs Controversial Legislation
Boris Johnson Urges Conservatives to Ignore Farage
SNP Ordered to Update Single-Sex Space Guidance Within Days
Starmer Set to Reject Calls for Wealth Taxes
Stolen Century-Old Rolls-Royce Recovered After Hotel Theft
Macron Presses Starmer to Recognise Palestinian State
Labour Delayed Palestine Action Ban Over Riot Concerns
Swinney’s Tax Comments ‘Offensive to Scots’, Say Tories
High Street Retailers to Enforce Bans on Serial Shoplifters
Music Banned by Henry VIII to Be Performed After 500 Years
Steve Coogan Says Working Class Is Being ‘Ethnically Cleansed’
Home Office Admits Uncertainty Over Visa Overstayer Numbers
JD Vance Questions Mandelson Over Reform Party’s Rising Popularity
Macron to Receive Windsor Carriage Ride in Royal Gesture
Labour Accused of ‘Hammering’ Scots During First Year in Power
BBC Head of Music Stood Down Amid Bob Vylan Controversy
Corbyn Eyes Hard-Left Challenge to Starmer’s Leadership
London Tube Trains Suspended After Major Fire Erupts Nearby
Richard Kemp: I Felt Safer in Israel Under Attack Than in the UK
Cyclist Says Police Cited Human Rights Act for Riding No-Handed
China’s Central Bank Consults European Peers on Low-Rate Strategies
AI Raises Alarms Over Long-Term Job Security
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Musk Battles to Protect Tesla Amid Trump Policy Threats
Air France-KLM Acquires Majority Stake in Scandinavian Airlines
UK Educators Sound Alarm on Declining Child Literacy
Shein Fined €40 Million in France Over Misleading Discounts
Brazil’s Lula Visits Kirchner During Argentina House Arrest
Trump Scores Legislative Win as House Passes Tax Reform Bill
Keir Starmer Faces Criticism After Rocky First Year in Power
DJI Launches Heavy-Duty Coaxial Quadcopter with 80 kg Lift Capacity
U.S. Senate Approves Major Legislation Dubbed the 'Big Beautiful Bill'
Largest Healthcare Fraud Takedown in U.S. History Announced by DOJ
Poland Implements Border Checks Amid Growing Migration Tensions
Political Dispute Escalates Between Trump and Musk
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
US Senate Votes to Remove AI Regulation Moratorium from Domestic Policy Bill
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
Jury Deliberations in Diddy Trial Yield Partial Verdict in Serious Criminal Charges
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
King Charles Plans Significant Role for Prince Harry in Coronation
Two Chinese Nationals Arrested for Espionage Activities Against U.S. Navy
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
×