THE ISSUANCE OF CREDIT CARD IS TRIGGERED.

THE ISSUANCE OF CREDIT CARD IS TRIGGERED.

The issuance of credit card in Colombia has been growing at a fast pace. Only in April 2012 the growth was 10% in comparison with March of the same year.

The agresive commercial strategy that has been launched by some retail business companies such as Grupo Exito, Falabella and La Polar is one of the reasons for this credit card boom.

Also the expansion strategy launched by Colpatria Bank, now owned by the Scotia Bank, of branded credit cards with key partners.

Falabella is the responsible for the 22% of the issuances, followed by Colpatria with the 19%, and Grupo Exito with the 16% of the credit card issued in April of the current year.

All this strategies have shown a red flag to the authorities and regulators because of the increase of leverage taken by the population. Another concern is about the way in which this entities have been doing the credit studies for them to know the leverage that can take a credit card holder.

But also this could mean that the banks are very worried because they could be loosing customers for these financial products and because of a change in the behavior of the consumers that could lead into the preference of taking the credit card of the retail business companies.

Anyhow this is a red flag for the regulator of the industry because we cannot afford a collapse in the financial system, the country is expanding its economy rapidly and  such a  fall would be a catastrophe