This may come as a shock to those of you north of the border but the average annual rate on a Mexican credit card hovers around 50%. That’s the average – there are bank credit cards that charge over 80% and store credit cards that are over 100%!!!
How is this possible, you ask? A combination of factors really. There are tons of people pouring into the market (widespread use of credit cards is a relatively new phenomenon here) and many newcomers don’t really understand the corrosive impact of high interest rates. At the same time, government regulators are loath to impose or enforce usary laws because, although unfair and dishonest, credit cards help move money out of the informal (cash) economy and in to the formal economy (which helps addresses their concerns over money laundering, tax compliance, etc.).
Enter digitt.com. Their goal is to provide transparent, fair, and honest access to credit. Existing credit card holders can visit the site, plug in the amount of debt they are currently holding, their monthly payment, and see, in real time, what their bank doesn’t want them to see: the impact in terms of time and money of their current rate. digitt then shows them what their world would look like if they were to transfer their debt to digitt’s lower plan. Digitt offers a 20% payoff plan. This is not a “teaser rate”. There are no tricks or hidden fees – just a strait forward and simple way to get out from underneath your debt load.
In the above example, this user is paying, at her current payment rate of $2K per month, $19.5K pesos in interest on her $28K debt. By transferring that debt to digitt, she could save $14.5K pesos – that’s a blistering 75% reduction on the cost of interest! Click on the image above to check out the live site.
This launch is just the first step. digitt’s long-term goal is to provide a series of credit and banking services that are organized around honesty, openness, and financial education. Agave Lab is very proud of them and we’re excited to have helped them get their start.