Mercado Pago Expands Credit Card Issuance Despite Brazil’s Debt Concerns
Mercado Pago, the fintech division of MercadoLibre (NASDAQ:MELI), continues to issue credit cards at a rapid pace despite concerns from Brazilian regulators about rising household debt. The company issued 2.6 million credit cards in Q2 2026, up significantly from 1.6 million a year earlier. Mercado Pago's vice president emphasized that the firm maintains robust underwriting models and monitors portfolio health to adjust its growth pace as needed. Brazil’s central bank has raised alarms over increasing household debt levels, particularly in credit card balances and unsecured loans—segments where Mercado Pago is expanding aggressively. The fintech segment now accounts for 40% of MercadoLibre's total revenue, with analysts projecting it to reach $18.1 billion in 2026. However, the company’s credit portfolio has grown by around 87% year over year—faster than overall business growth—which could pressure net interest margins and increase loss provisions. Mercado Pago is also expanding into Mexico and Argentina, where newer loan cohorts offer less performance history. Inflationary pressures in Argentina may pose additional risks to credit quality. The company has drawn regulatory scrutiny for its rapid expansion, with its credit portfolio reaching $11 billion by Q3 2025—up 83% year over year.
Topics: Brazilian economy credit cards debt concerns Mercado Pago