The interest cap will only apply to new operations. In other words: Debts already on the revolving list of credit cards will continue to grow based on current interest rates. In October, according to the latest data from the central bank, rates for this method reached 431.6% annually on average.
Fernando Haddad celebrates the adoption of the roof: “We have won a stage.” The Finance Minister said that the cap on renewable interest rates returns the system to a “completely inappropriate” situation. “When someone is subject to 450% interest annually, it is because they are not actually in a position to pay,” Haddad said in an interview with reporters.
The important thing is for the population who suffered greatly from the effects of the stratosphere [dos juros do rotativo], will be felt next year with this new discipline. This doesn’t stop us from improving your credit card. At least we already had an end to what seemed, in the eyes of the residents, something very offensive.
Finance Minister Fernando Haddad told reporters
Context
In August, the head of the Bank of England defended the extinction of revolving credit. For Roberto Campos Neto, the end of the revolving system would be the solution to the problem of high interest rates and credit card defaults in Brazil. However, the BC president’s idea also included a discouragement of interest-free installments, which sparked backlash from the private sector, particularly in retail.
The discussion led to questions about interest-free installments. Banks said interest-free installments increase defaults and charge high interest fees on the revolving loan. However, card and trading machine companies say this hypothesis is incorrect and not based on numbers. CMN did not address this issue.
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