Guatemala: Modernising credit card cover

Diego Alejos Rivera

In the past two years, several congressmen have presented bills which seek to adequately regulate credit cards, as they are an ever-growing financial service in Guatemala. The bills presented seek to establish adequate rules for all parties involved: credit card issuers; credit card holders and affiliated establishments.

The issuance of credit cards is still only regulated by article 757 of the Guatemalan Commercial Code. This article, which came into effect in 1971, is the only legal basis for a multimillion dollar business. Article 757 establishes the requirements each credit card should incorporate, but fails to provide any structure on which the parties involved may act upon. As such, the evolution of credit card usage and issance in Guatemala so far has been mostly unregulated. This has given way to a business regulated through customary practice, which in some cases has allowed for certain practices that have raised concern from multiple sectors. Although not common, such practices have created a need, as proposed by various congressmen, to adequately regulate the credit card business through the passing by Congress of a modern and technical bill, which will set clear and modern rules for all participants.

Even though efforts have been made recently to regulate credit cards, the future still seems unclear. None of the bills presented in Congress follow the same structure or substance. While some of the bills aim to provide adequate rules which provide credit card holders and issuers a certain equality with regards to their rights and obligations derived from the credit card agreement, others are much more protectionist towards card holders, and look to prevent certain abusive practices from the issuers. What seems to be certain is the approval in the near future of one of these bills, as two of them have received strong support and look to be passed shortly.

Diego Alejos Rivera

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