BRASILIA, April 17 (Reuters) – Brazilian Finance
Minister Fernando Haddad said on Monday the government is going
to announce this week measures to improve credit conditions in
the country, including one regarding revolving credit card
rates.
Revolving credit card rates are the interest consumers must
pay when they cannot pay their credit card bills in full,
pushing unpaid amounts into future installments.
Talking to reporters ahead of a meeting with the Brazilian
banking federation, Haddad said that the ministry will launch 14
measures to improve the credit environment. He argued that the
revolving credit card issue lies at the core of the soaring
indebtedness among Brazilians.
Haddad said the discussions will focus on high credit card
interest rates describing it as a widespread burden “being
charged to the population.”
The design of current interest rates for credit cards is
harming low-income Brazilians, he said. “A good part of the
population that is in the credit bureau today is because of
credit cards.”
The revolving credit card interest rate in Brazil is 417.4%
per year, according to the latest data from the central bank, by
far the most expensive type of credit for individuals.
Consumers bear this fee when they do not pay the entire
credit card bill, with the remaining amount subject to interest.
The central bank established in 2017 that consumers are
restricted to a maximum of 30 days on the revolving credit card
line.
Following this period, banks are mandated to provide more
cost-effective credit options such as credit card installments,
which carry an annual interest rate of 189.6%.
For Goldman Sachs analysts, “implementing a cap on revolving
credit card rates could be challenging, given the widespread use
of interest free installments.”
(Reporting by Victor Borges and Marcela Ayres; Writing by Peter
Frontini; Editing by Aurora Ellis)
