Interest rates soar as credit tightens in Mexico

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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.