She isn't alone. Past-due credit card debt in Mexico has almost doubled over the last year as the nation's economy has slowed. Growth in remittances from the U.S. has stagnated because of a slowdown in housing construction, a field that employs an estimated 1 in 5 Mexican immigrants.
In June, tardy balances accounted for 6.1% of Mexico's total credit card debt. That's the highest percentage in 5 1/2 years. And it tops the U.S. rate of 4.41% tallied by the American Bankers Assn. in the first quarter of 2007.
Analysts say Mexico's late payments are still manageable and a far cry from the 40% delinquency rates on consumer credit that followed the nation's 1994 peso devaluation.
Despite the recent surge in credit, Mexico's economy still runs largely on cash. And it remains one of the most poorly served nations in Latin America with respect to personal and business loans. Domestic credit as a percentage of gross domestic product is just 17% in Mexico, compared with 63% in Chile and 35% in Brazil, according to data compiled last year by Morgan Stanley.
Mexico's economy needs more credit, not less, experts say, to reach its potential.
Still, the recent sharp growth in late payments could be a harbinger of trouble.
Mexico's economy is tied closely to that of the U.S., the destination for 80% of Mexico's exports and millions of its workers. If the U.S. tumbles into recession stemming from its sub-prime mortgage debacle, Mexico could end up with a hangover from its own credit binge.
"If people lose their jobs . . . they can't pay off their credit card debts and we're going to see the problem accelerate," said Alfredo Coutino, senior economist at Moody's Economy.com. "Monetary and financial authorities need to pay attention."
Analysts trace Mexico's credit boom to the recovery of its economy and its banking sector from the mid-'90s financial meltdown, and the gusher of liquidity that has juiced financial markets worldwide the last few years.
Falling rates on mortgages and commercial loans and low returns on government securities led Mexican banks to seek more lucrative business. Many turned to consumer credit, specifically credit cards, from which they could reap big profits.
Mexico's government, plagued by tax evasion, is pushing consumers to use plastic because it's easy to collect tax on electronic sales. It sponsors cash giveaways, raffles -- even a prize-laden game show -- for people who make credit card purchases.
