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After Credit Card Rotating Interest Rates Reach a Level Capable of Exceeding 430% Per Year, Government Set Rule: Debt Cannot Increase Beyond 100% of Original Value, Limiting Duplication. Measure Was Born in Desenrola, Passed Through Congress, and Is Seen as Temporary by Febraban Across the Country.
You may have experienced this: one month you can’t pay the full bill of your credit card, the next month you repeat it, and when you realize it, you are trapped in interest and debts that turn into a snowball. The change is that, since January of last year, the rotating debt has a limit.
According to g1, the rotating interest rates charged on Brazilian credit cards could drive the debt to over 430% per year, a level described as the highest in the world. Now, with the credit card rotation, the debt can only increase up to 100% of the amount owed, meaning it can at most double.
What Changes in Credit Card Rotation in Practice
The central rule is straightforward: in credit card rotation, interest cannot make the debt exceed double the original amount.
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More than 40 million Brazilians are sinking into credit card debt, and indebtedness now affects 80.4% of Brazilian families.
This means that if a person did not pay a bill of R$ 1,000, the debt can reach “only” R$ 2,000 with interest.
It is still a heavy amount, but the goal of the ceiling is precisely to reduce the “snowball” effect that made families accumulate debt month after month on the card, with accelerated growth of the outstanding balance.
Why the Government Decided to Impose a Ceiling
The decision comes after the rise in rotating credit card interest rates, cited as capable of exceeding 430% per year.
The central point of the argument is that this level of interest tends to push those who delay payment into a cycle of indebtedness that is hard to break.
According to the material, the ceiling tries to curb the multiplication of debt and create a clear limit on how much the credit card rotation can grow over time.
How This Entered Desenrola and Passed Through Congress
The ceiling on credit card rates is part of the Desenrola program and was approved in October 2023 by the National Congress.
The framework stipulated that financial institutions would have 90 days to present their own proposal for the self-regulation of rotating rates.
As there was no agreement among them within the deadline, the Monetary Council maintained what Congress had approved, consolidating the cap on credit card rotation.
What Banks Say and Why They Challenge the Measure
In a statement, Febraban stated that the regulation has disciplined crucial points for the correct application of the law that limits credit card rotating interest rates.
At the same time, the entity claims to see the solution as temporary and argues that, since it does not address the “root cause,” interest rates should remain at a high level.
Febraban also associates this scenario with negative effects, stating that this could harm commerce and those who most need credit to consume, keeping the debate open about the real impact of the ceiling on the credit card market.
What You Should Observe in Your Credit Card Bill From Now On
The main thing is to understand that the limit refers to how much the debt of the credit card rotation can grow: at most, it doubles. In practice, this changes the ceiling of damage when the bill is not paid in full and the balance enters the rotation.
In your opinion, does this ceiling on credit card rotation really protect families, or does it just postpone the problem and keep credit expensive the same way?
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