In Argentina, annual inflation reaches 64%. To try to beat the rise in prices, Argentines buy cars, shoes, markets or even toys with a credit card and in various installments.
By our correspondent in Buenos Aires, Theo Conscience.
In a toy store in Buenos Aires, Betina is preparing to buy her granddaughters two stuffed animals and a board game. “5125.50 pesos”, says the cashier, or about 15 euros in total. Betina pays by credit card in three interest-free installments.
“I buy everything in installments. If I have to buy an appliance, if I have to buy food, when there are installments, I pay in installments,” he explains.
Gisela is the daughter of Betina. She also cancels her payments that way. “Here in Argentina it is quite convenient to use quotas. You pay through the months and as there is always an inflation that is growing, the installments are getting smaller and smaller due to the inflation regime that exists, ”she says.
Since January, monthly inflation in Argentina has exceeded 5% several times. This means that the real value of the next installment that Betina will pay will be 5% less than the first. For the toy store it is also a benefit, because it allows to sell more.
“Of ten purchases, perhaps eight are with a card,” says Paola Villalba, the store manager.
The Inflate app
This consumption incentive is part of a public policy. The Now 12 program allows you to buy durable goods produced in Argentina in 6, 12 or 24 installments. But in these cases, paying cash usually offers another benefit.
“When you go to a business, for example, they tell you: ‘Look, you can do it in one payment with a 20% discount, or do it in 12 installments. And that’s when doubt arises, and he doesn’t know what suits him ‘”, explains Ariel Díaz, who created Infleta, an application that helps choose the best way to pay. This calculator compares the cash price and the price in installments taking into account inflation forecasts.
“We as Argentines already know that our currency is losing value month after month. For example, at my job, I have inflation adjustments every three months. In other words, paying a fee of 10,000 pesos today is more difficult than paying it in two years”, he details.
While installment purchases are very common among the middle class, many people cannot access this form of payment. In Argentina, a third of the active population belongs to the informal sector, and almost one in four people lives below the poverty line.