Credit card debt may be keeping the Mexican economy afloat

“Buy now pay later” at usurious rates may be a disaster in the making.

The Big News Breakdown. Unpacking this week’s most important news.

The Mexican economy is shrinking. Job creation is nowhere near the rates needed to keep unemployment down or underemployment at bay.

Against economic logic, consumption is still up. The argument that a higher minimum wage may be buoying consumption is losing currency as the big increases of the past fade into the distance. Indeed, for a while now higher wages have had the peculiar effect of boosting retail sales while keeping profits low.

Consumption is cooling, just not at the rate expected given the economic slowdown. Beyond the minimum wage, another trend seems to explain this effect.

In the first three months of 2026, consumer credit went up by 7.2%. Car sales were also up—by 3.7%—but it was the car loans that were really booming—they grew by 11.2% in the first quarter of 2026.

Traditionally, financial institutions did not give credit to the average Mexican. Banks seem to be loosening their previous standards—AI and hyper-personalisation of products are given as the reason for which they are taking greater risks. There seems to be another big reason for Mexico’s sudden boost in consumer credit.