For years, Argentine families used 50%+ inflation as a tool that quietly burned down their credit card balances.
Milei killed inflation, the tool stopped working, and now the bill is coming due.
Household loan delinquencies at Argentine banks climbed to 10.6% in January 2026, up from 9.3% in December - the highest level since the country's central bank started tracking the data.
Non-bank personal lending looks even worse. Defaults on loans from digital wallets, retail store cards, and other fintech-style lenders hit 24% in January, meaning roughly one in four borrowers is behind on payments.
When Milei took office in December 2023, the bank household delinquency rate was 2.8%. In about two years, it's nearly quadrupled.
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For years, Argentines relied on triple-digit inflation to slowly burn off the peso value of their fixed-rate credit card debt. Pay the minimum, let inflation do the rest - that implicit subsidy is gone.
Milei's plan brought inflation down sharply, but it also locked interest rates above the new, lower inflation rate. Real rates - the rate after inflation - turned positive for the first time in years.
Wages haven't kept up with the cost of basics. Utility bills have more than quintupled since Milei took office, eating up the discretionary income that used to cover monthly debt payments.
The squeeze has forced banks to pull back on lending. Some private banks posted losses in September equal to around 2% of assets, then a smaller but still negative result in October.
Milei has been counting on credit to fuel growth as part of his broader economic plan. Defaults at a 15-year high pull the wrong way, with banks tightening lending right when the economy needs it loose.
That's a problem Milei's October 2025 midterm win, decisive as it was, doesn't solve.
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