Credit due in South America
South American countries -- including Chile and Brazil, two of the region's healthiest economies -- are going through growing pains as the use of credit grows. The credit-fueled spending has driven extensive economic growth. But it has also opened the door to abuses, as credit issuers have used predatory techniques to lure customers, particularly young and less affluent ones, in countries where regulation is scant, annual interest charges can top 220 percent and consumers cannot seek bankruptcy protection, economists and consumer defense groups say.
"They are learning every trick that was learned in the United States to make credit cards the most valuable part of the banking business," said Lewis Mandell, a professor emeritus at the State University of New York at Buffalo, who wrote a book on the history of the credit card industry. "And unfortunately, the problems this caused in the United States are likely to repeat themselves in Latin America."