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Law No. 14,690 Created Definitive Limit of 100% for Credit Card Rotating Interest, Altered Banking Practices, Reduced Chronic Debt and Established Permanent Effects on the Brazilian National Credit Market
The Desenrola Law, established by Law No. 14,690/23, changed credit rules in Brazil by creating a permanent limit for rotating credit card interest, effective since the beginning of 2024, with a direct impact on indebted consumers.
Definitive Limit for Credit Card Rotating Interest
The legislation established that interest and charges on rotating credit card debt cannot exceed 100% of the original amount borrowed.
In practice, this means that an initial debt of R$ 1,000 can never result in a charge of more than R$ 2,000, including principal and financial charges.
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The change ended the previous model, where rates exceeded 400% per year, creating prolonged cycles of indebtedness and difficulty in repayment for consumers.
The new ceiling aims to prevent debts from becoming unpayable, providing predictability to citizens and greater balance in the relationship between financial institutions and clients.
Credit Card: End of the Financial Snowball Logic
Before the rule took effect, revolving credit worked as a mechanism for rapid accumulation of charges, increasing owed amounts in short periods.
With the legal limit, the growth of debt is now controlled, reducing systemic risks and offering a more sustainable alternative for card users.
The model’s inspiration came from legislations adopted in countries like the United Kingdom, referenced in the context of formulating the measure.
The application of the ceiling represents a structural change in the credit market, with permanent effects on contracts and banking practices in the country.
What Was the Desenrola Brasil Program
The Desenrola Brasil Program was created to allow debt renegotiation and clean the names of millions of Brazilian delinquents.
The initiative involved debts with banks, retailers, and public service concessionaires, including water and electricity bills.
The central objective was to facilitate payment, allow discounts, and gradually reintegrate citizens into the formal financial system.
To achieve this, the public was divided into distinct categories, with specific rules for installment payments, interest, and guarantees offered.
Rules and Benefits of Tier 1
Tier 1 was directed at the low-income population, including people with an income of up to two minimum wages or registered in CadÚnico.
In this category, the government offered guarantees through a specific fund for debts up to R$ 5,000.
The conditions included installments of up to 60 months, interest limited to 1.99% per month, and a grace period of 30 to 59 days.
These measures reduced risks for creditors and increased participation from families with limited immediate payment capacity.
Differences Between Tier 1 and Tier 2
While Tier 1 had strong state participation, Tier 2 served people with a monthly income of up to R$ 20,000.
In this group, negotiations occurred directly with banks, without guarantees from the Union, but with tax incentives granted to institutions.
The negotiations were conducted outside the Gov.br platform, respecting criteria defined between clients and participating banks.
The segmentation allowed differentiated strategies, maintaining focus on renegotiation without compromising the system’s sustainability.
Validity of the Law and Permanent Effects
Even with the conclusion of initial enrollment deadlines for the program, the 100% limit for rotating interest remains valid in 2026.
The law consolidated consumer rights, such as the prohibition of abusive interest, greater transparency in bills, and the possibility of portability.
It also reinforced the importance of financial education and responsibility in credit granting by institutions.
The full text of Law No. 14,690/2023 is available on the Planalto website, and additional guidance can be consulted on the Central Bank of Brazil’s portal.
With information from BMC News.
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