Nombre del estudiante: XXXXXXX

Nombre del trabajo: ANALISIS DE LA OFERTA

CREDITICIA

Fecha de entrega: XXXXXX

Campus: TOLUCA

Carrera /Prepa: ADMINISTRACION DE

EMPRESAS

Semestre/Cuatrimestre: XXXX

Credit cards offer in Mexico analysis

Abstract (espaol)
Este proyecto de investigacin est concentrado en explicar la situacin de la oferta
crediticia en nuestro pas Mxico. Inicialmente se tomar como punto de partida la
explicacin breve de este tipo de financiamiento, sus ventajas y desventajas.
Despus se explicar un panorama general de la oferta crediticia, explicando la
tendencia y relacin entre las variables: ingreso y CAT. Siguiendo con el desarrollo
del tema se realizar un anlisis de la oferta de tarjetas de crdito de BBVA,
Banamex, y Santander, con el objetivo de generar un anlisis del CAT promedio de
cada banco y los ingresos mnimos requeridos para la contratacin de sus servicios
financieros, y as demostrar de manera breve que banco es ms costoso que otro.
Para finalizar se mostrar una interpretacin de la relacin existente entre el costo
de los servicios bancarios y el nivel socioeconmico por segmento.
Abstract (english)
This investigation Project is focused on explain the credit offer situation, in our
country, Mexico. The initial point of the project its an explanation of this type of
finance instrument, its advantages and disadvantages. Then I am going to talk
about the general view of the credit offer, and the link between the income and the
total annual cost. To keep going with the development of the topic an analysis per
each bank will take place, the considered banks for this study are BBVA, Banamex,
and Santander; with the main purpose to compare the average annual total cost,
and the annual payment, of the three banks credit products, in order to observe
which bank is more expensive. Finally, an interpretation of the relationship among
the bank services cost and the socioeconomic segment will be shown.
Abstract (franais)
Ce projet de recherche se concentre sur l'explication de la situation de loffre de
crdit dans notre pays Mexique. Initialement, il sera considr comme un point de
dpart la brve explication de ce type de financement, ses avantages et ses
inconvnients. Aprs un aperu de l'offre de crdit sera expliqu, expliquant la
tendance et la relation entre les variables : le revenu et CAT. Aprs le
dveloppement du sujet est une analyse de l'offre de cartes de crdit de BBVA,
Banamex et Santander se tiendra, dans le but de gnrer une analyse de la
moyenne de CAT de chaque banque et le revenu minimum requis pour contracter
les services financiers, et ainsi dmontrer brivement que la banque est plus cher
que l'autre. Pour mettre fin une interprtation entre le cot des services bancaires
et segment de niveau socio-conomique sera affich.

Theoretical framework
The object of analysis of this investigation project is how the cost of credit finance
services behaves in relation with the income perceived by families or individuals. for
these academic purpose many tools were considered as valuable information
sources, for example: official websites, books, specific topic blogs and specialized
magazines.
The main theory is that in Mexico, if the people has an undeveloped socioeconomic
level, will trigger a higher total annual cost of a credit financial service. To measure
this values, I am going to use the average annual total cost, the minimum income
needed to acquire credit cards from different bank institutions; which are BBVA,
Banamex and Santander. Also the socioeconomic segmentation for Mexican social
structures from IMAI, will be used as a point of comparison to prove this theory.

Introduction
A personal credit card is a service issued by financial companies to give the holder
an option to borrow money of funds. This tools charge interest and are used for
short-term financing. The idea of big company borrowing money easily is great but
like in almost everything, they are advantages and disadvantages, and credit cards
are not the exception1.
Advantages2:

Convenience
Record keeping
Low-cost loans
Instant cash
Perks and benefits
Build positive credit
Purchase protection
Balance surfing

Disadvantages3:
Risk of overuse
An extra income thought
Payment delay incur in a bad credit bureau report
High interest rates
Now that, the concept and the general frame of a credit card its described, lets
move on, on the central topic, which is the purpose of this investigation project. For
this, three different bank companies have been selected, BBVA, Banamex and
Santander, to compare their total annual cost and minimum required income for
being available to use these services. The next part of the project will explain the
general offer of these services, and behavior between the total annual cost and the
income shown with a sample composed of twenty-one different credit cards.

General market credit cards offer

As we can see in the chart below, credit cards are ordered, from the highest total
annual cost to the lowest one, each of these credit cards linked with their minimum
required income for been eligible to have one.

If we put attention on the frozen Bancomer credit card, the total annual cost is of
97.20 % and it requires a minimum income of four thousand Mexican pesos. In the
other side the Santander world elite credit card has a total annual cost of 14.30%
and its needed to prove a monthly income of $222,500 Mexican pesos, this last
product is focused for business people. in the next graphs we can observe and
emphasize this trend.

As its being said, the trend points that with an increase in the minimum income required the
total annual cost decrease, this can be explained as a risk evaluation strategy combined
with a long term more attractive costumers, where the low income segment represents high
risk costumers and the high income profile is view as a long term attractive costumer.
Continuing with the investigation and to prove that effect of high income- low interest rate,
the three selected banks are going to be analyzed in an isolated way.

BBVA Bancomer
In the case of the bank BBVA the high annual cost is of 97.20% for a minimum monthly
income required of $4000 Mexican pesos, the lowest annual cost is of 34.47% for a
minimum monthly income required of $50,000 Mexican pesos, and the average annual cost
from their main six products is 67% with an average income required of $14,833.33 pesos.
The high annual cost- low income required trend, can also being observed as shown in the
next chart and graphics.

Banamex
For Banamex credit card products, the high annual cost is for the B-SMART with a
percentage of 46.80% and an income required of $7000 Mexican pesos, and for the
lowest annual cost is for the Banamex Platinum, which rate comes to 24.80% and
an income required of $50,000 pesos. The average annual cost of the five more
popular products is of 41.56% with an average income required of $24,200 pesos.

If we pay attention in the graphics above, we can observe also in these five
Banamex products there is also a low income-high total annual cost effect.

Santander
In the chart below of Santander credit cards, we can emphasize that the more
expensive product of the list is the SANTANDER CLASICA, with a total annual cost
of 27.90% with a minimum income required of $7,500 pesos, the SANTANDER
WORLD ELITE product deals the cheapest credit card position with a monthly
income required of $222,500, and with a total annual cost of 14.30%. The interest
fact of this product mix is that the average total annual cost is lower, than in the last
two banks shown before. The rate shows a 23.24%, the average income required of
this ten products mix is of $47,858.33 Mexican pesos.

if we analyze the next graphics, we can also see that there is a marked low annual
cost-high income trend to.

Annual total cost and income required averages

comparison between banks

10

At this part of the project, we are going to talk about which of the three banks,
compared on this investigation, which one is the cheapest one and which one is the
most expensive. To measure this, the general offer average on the market
(highlighted on green in the chart) will play an important role, as point of measure.

As we consider the graphic above, we can assume that the bank institution with the
lowest total annual cost average on its products is Santander, and the most
expensive is Bancomer, with a 44% difference, which is almost the twice of totals
Santanders annual cost average of 23%. Banamex is only 2% above of the general
total annual cost offer on the market, with a 42% average total annual cost.

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The aspects shown before are also related with the relationship between total
annual cost and the monthly income required. It can be explained because, talking
about average income required, Santander drops the highest indicator with an
average of $47,858.33 Mexican pesos per month, while BBVA, which shown the
highest total annual cost, has the lowest minimum income required, with a
$14,333.33 pesos indicator. Banamex seems to be the more balanced financial
institution because its average indicators are closer to the General offer averages.
While general offer average for minimum income required indicator is $32,789
pesos, the same indicator for Banamex points a $24,200 pesos variable.

Credit
card
segmentation

segmentation

by

socioeconomic

This final part of the investigation is considered to explain the effects of being in a
low socioeconomic position on the quality and characteristics of the credit card
products offered by bank companies. For this, the next chart contains the three
more similar products, for each bank, products which are oriented to the three
socioeconomic capable segments (A/B, C+, C, D+, D) to acquire credit services.

12

To explain this point, lets take a look to the two opposite poles of the socioeconomic
segments for this credit card products, which are the segment A/B and the D
segment, the Santander world elite credit card (14.30% TAC) and the frozen
BBVA card (97.20% TAC) respectively. These two options have a difference of
82.9% on a total annual cost, and a $218,000 Mexican pesos difference in the
monthly required income. This means that the total annual cost for the D segment
increases 82.9%, thats because the risk that represent for the banking institutions to
borrow money to low income costumers.

Personal conclusions
To conclude, the most relevant aspects of this investigation project are the link
between the minimum income required and the total annual cost, that show that an
increase in the minimum monthly income required traduces into a lower total annual
cost. Also it is important to mention, that the credit general offer indicates that
Santander has the cheaper total annual cost, and Bancomer tends to be a more
attractive option for costumers with a low monthly income but it affects its total
annual cost, making BBVA services more expensive. On the other side Banamex
play the role of the most equilibrated option, because of its average total annual cost
and minimum income required near to the general market offer average for this type
of products. Another important aspect to remark its the risk that represent for the
banking institutions to borrow money to low income costumers, fact that affects in an
82.9% the total annual cost for the segment D to acquire credit card services.

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Bibliography
http://www.360financialliteracy.org/Topics/Credit-and-Debt/Credit-Cards/Advantages-andDisadvantages-of-Credit-Cards#sthash.UWSdhzBs.dpuf
http://www.takechargeamerica.org/credit-cards-advantages-and-disadvantages-for-theconsumer/

http://www.investopedia.com/terms/c/creditcard.asp#ixzz41EoV4cwt

References
Unknown. (Not Specified). Credit Card. 25/02/2016, de Investopedia Sitio
web: http://www.investopedia.com/terms/c/creditcard.asp
1

AICPA. (2014). Advantages and Disadvantages of Credit Cards. 25/02/2016, de

360 financial literacy Sitio web: http://www.360financialliteracy.org/Topics/Creditand-Debt/Credit-Cards/Advantages-and-Disadvantages-of-CreditCards#sthash.UWSdhzBs.dpuf
3

Unknown. (Not Specified). Credit Cards: Advantages and Disadvantages for the
Consumer.
25/02/2016,
de
Take
chargeamerica
Sitio
web:
http://www.takechargeamerica.org/credit-cards-advantages-and-disadvantages-forthe-consumer/
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