Household debt and consumer credit in Latin America

In Argentina, legal experts and local authorities have advised consumers to avoid minimum-payment plans and to consult the Consumer Defense Office regarding terms, conditions, and the Total Financial Cost (CFT) before obtaining credit. The Municipality of Almirante Brown specifically warned against refinancing debt without consultation or taking new loans to settle existing ones, noting that many households face distress due to high indebtedness for essential goods like food and medicine. Failure to manage balances can result in punitive interest rates exceeding 100% of the CFT. While banks have specific legal timeframes to pursue debt—one year for executive actions and up to three years for ordinary actions—debt does not automatically vanish from records once these periods pass; debtors must explicitly invoke prescription to make it legally valid. In Chaco, Giovanni Tessaro, Director of Consumer Defense, has warned of rising delinquency rates and increased reports of harassment by banks, financial institutions, and collection agencies. He noted that consumers are receiving intimidating calls and messages, emphasizing that original creditors remain legally responsible for the conduct of outsourced agencies. Consumers are advised to preserve evidence of intimidation, as Consumer Defense can facilitate mediation for interest reductions or extended terms. Additionally, in Santa Fe, deputy Germán Scavuzzo has introduced a bill to regulate and sanction extrajudicial debt collection practices to protect consumer privacy. In Chile, a new formula for calculating minimum payments began gradual implementation in June 2026. This calculation incorporates interest, commissions, and other charges alongside a portion of the financeable balance. Although paying the minimum satisfies the period's requirement, the remaining balance carries over and continues to accrue interest. In Mexico, specialists have noted that economic uncertainty and rising expenses contribute to increased stress, anxiety, and depression among families.