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The New Law No. 14,690/2023 Imposes Limits on the Interest Rates of Revolving Credit, Restricts Bank Fees, and Ensures Transparency in Charges, Offering More Protection to Consumers and Combating Overindebtedness Caused by High Credit Card Costs
Law No. 14,690/2023 brought significant changes for credit card users in Brazil. The main goal is to combat overindebtedness and reduce abusive interest rates that affect millions of consumers. The new rules seek to balance the relationship between banks and customers, ensuring more transparency in charges.
The main change is the cap on interest rates for revolving credit and installment payments. Now, the total debt — including interest and charges — cannot exceed double the original amount. Thus, if someone owes R$ 2,000, the maximum amount that can be charged is R$ 4,000.
Rules for Revolving Credit and Installments of Credit Cards
Customers who only pay the minimum on their statement automatically enter revolving credit, known for having higher interest rates.
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However, the Central Bank determined that this modality can last only one billing cycle, that is, 30 days.
After this period, the bank must offer another credit option with more favorable terms.
This measure aims to prevent debts from growing uncontrollably, as revolving credit is usually the biggest contributor to high levels of indebtedness.
Therefore, the new rule creates a clear limit and prevents the final amount from becoming unpayable.
Allowed Fees and Prohibition of Abusive Charges
Another important change involves the fees charged by banks. Financial institutions can only charge fees for the following services: annual fee, issuance of a second card, cash withdrawals on credit, use of the card to pay bills, and emergency credit evaluation.
Charges outside this list are considered abusive and can be reported. Furthermore, access to the app and the sending of the statement must be free of charge.
The blocking or cancellation of the card can also only occur with prior notice — except in cases of suspected fraud.
With information from Diário do Comércio.
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