MEXICO CITY -- The Wal-Mart slogan in Mexico is the same as in the USA: Always low prices. Yet that doesn't apply to the store's credit cards, which carry a 69.6% annual interest rate.
Such high rates are increasingly common in Mexico, and they are rising even further as banks worldwide tighten lending limits amid a worsening economic crisis.
Some economists are worried it could send millions of Mexicans spinning into a cycle of debt, a situation that could hurt the United States, Mexico's largest trading partner.
"There is definitely a risk because you're combining high interest rates with lower income," said Liliana Rojas-Suarez, an economist at the Center for Global Development in Washington.
Up to now, Mexico's financial system has suffered less damage than that seen by U.S. banks because of tougher lending terms imposed after Mexico's own financial crash in the 1990s.
Mexico also has a much smaller market in derivatives, which are investment instruments that amplified the U.S. credit crisis.
However, the financial burden on Mexican families is getting steadily heavier.
From January to September, average interest rates on bank credit cards in Mexico rose 10 percentage points to 41.78% — more than triple the rate in the U.S. rate.
Credit has always been more expensive in Mexico than the United States, said Rafael Amiel, Latin America director at Global Insight, a consulting firm. Capital is scarcer in Mexico, and thus, banks can charge more for it, Amiel said.
Fewer banks mean less competition. And banks charge relatively high fees for services such as wire transfers and bill payments, allowing profits even though banks loan less money.
Mexicans tend to use non-bank loans, including store credit cards, far more than bank-issued credit cards, according to Mexico's Financial Services Consumer Protection Commission.
And rates are higher partly because many Mexican customers are high-risk, first-time borrowers.
"I believe banks are covering a little bit for a higher risk than that in the U.S.," said Bernardo Garza, credit marketing manager for GE Money Mexico, part of General Electric.
The company administers cards for Home Depot, Woolworth and other chains in Mexico at interest rates of 35% to 70%.
"But on the other hand, I also believe … that banks and also financial institutions who offer cards see an opportunity there and are trying to get the most out of it," Garza said.
Wal-Mart of Mexico's credit cards are administered by the Spanish-owned bank BBVA Bancomer. Wal-Mart spokesman Antonio Ocaranza said he could not comment on the interest rates set by the bank. BBVA Bancomer declined comment.
But Wal-Mart of Mexico also has its own fledgling bank, which offers lines of credit to customers at a 59% annual percentage rate.
"That's pretty low for this type of product," Ocaranza said.
Costco of Mexico's marketing director, Abelardo Navarrete, said the company's credit card rate of 53.31% is reasonable.
"The market conditions are different," Navarrete said. "Credit interest in the U.S. is always below Mexico's. The risk of credit cards in the U.S. is always lower than Mexican risk."
Costco's credit card is financed by Banamex, the Mexican subsidiary of Citibank, and Navarrete said Costco had no role in setting the interest rates. Banamex did not respond to requests for comment.
In recent years, the number of mortgages and car loans also has soared in Mexico, at rates much higher than in the United States.
Ford, for example, is offering a five-year, 17% loan on a Focus sedan in Mexico City, and that is with a 25% down payment.
Hawley is Latin America correspondent for USA TODAY and The Arizona Republic