Learn about the new rules for credit cards

The new rules for credit cards will come into effect from July 1, 2024. Among the key changes is the portability of revolving credit, which allows consumers to transfer debts to banks that offer better terms.

This procedure has been previously regulated central bank (BC) and the National Monetary Council at the end of last year. The decision, which sets the interest limit on revolving credit and billing in installments at 100% of the value of the debt, came into effect at the beginning of this year.

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The outstanding balance of the credit card bill can also be transferred to postpaid methods, where resources are used to pay off debts already incurred, and other related debts, which include those already paid in installments.

This means that consumers will be able to transfer their debts from one bank to another that offers more favorable terms, as long as the institution is licensed by the BC.

Experts recommend that consumers compare proposals between different financial institutions before negotiating. The consumer chooses the bank with the best offer, transfers the debt and signs a new contract with new conditions.

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Another important change is the need for greater transparency in credit card data. Starting July 1, bills must highlight basic information, such as the total value of the bill, the due date, and the total credit limit.

Invoices must also include a Payment Options area containing information about the mandatory minimum amount, fees in case of minimum payment, financing options for the outstanding balance, monthly and annual interest rates, and the total actual cost of credit transactions.

Credit card statements must contain additional information

In addition, there will be a section containing additional information, such as entries in the payment account, identification of contracted credit operations, interest and fees charged in the current period. It will also be necessary to report the total amount of interest and finance charges charged.

The Brazilian Association of Credit Card Companies and Services (Abecs) reported that companies are already adapting to the new rules.

“APEX has been monitoring both issues at associated issuers,” the association announced in a memo. “They are preparing and working internally on the necessary adjustments to adapt to regulatory changes.”

In 2023, Brazil registered 212.3 million active credit cards, according to central bank data.

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Financial education initiatives should be promoted by BC-licensed payment institutions. Banks and other institutions must ensure that a manager is appointed responsible for this area, who must establish mechanisms to monitor and monitor the effectiveness of the measures adopted.