Credit cards are one of the most widespread financing instruments in Mexico, with over 35 million cards in circulation according to the Bank of Mexico (Banxico). However, behind the facade of a seemingly uniform product lies a variety of charge structures that can greatly affect the final cost of borrowing. The predominant model in traditional banking is the rotating interest scheme, where if a cardholder does not pay off their total balance by the due date, the outstanding amount begins accruing interest at an agreed annual rate, which often hovers around 48% annually, or roughly 4% monthly.

In practical terms, if a cardholder has an unpaid balance of 5,000 pesos and does not cover it entirely, they could incur about 200 pesos in interest during the first period. This creates a cycle of debt for many consumers who may only make the minimum payment, leading to a compounded residual balance that incurs further interest. The financial implications are significant, especially for those who may not fully understand the cost differences between paying a daily commission versus a rotating interest rate.

As credit card use continues to grow in Mexico, it is crucial for consumers to be aware of these different cost structures. Financial education becomes vital, so that cardholders can make informed decisions and avoid falling into a debt trap that can have long-lasting financial repercussions. This subtle but important distinction in how credit is charged could determine the financial health of millions of card users across the country, highlighting the need for transparency in credit card terms and more consumer protection measures.