Last month, a significant transformation in the financial sector was sanctioned with the aim of benefiting millions of Brazilians who use credit cards. President Luiz Inácio Lula da Silva signed new legislation that promises to change the panorama of revolving credit in the country.
What are the main changes brought about by the new law?
With the sanction of Federal Law No. 14,690/23, a new rule for revolving credit was established, limiting the interest and charges that can be charged in cases of late payment of the card bill. From now on, interest on revolving credit cannot exceed twice the original debt. This means that if a consumer has a debt of R$100, the maximum amount to be charged, with interest and charges, cannot exceed R$200.
How does this measure affect the lives of Brazilians?
This new regulation comes as a relief for retirees and workers, who often find themselves trapped in a cycle of debt due to the high rates associated with revolving credit. With interest rates that, before the change, could reach 431.6% per year, many consumers found it difficult to get out of debt. The new measure aims to provide a more effective control tool over Brazilians’ personal finances, avoiding accumulations of unpayable debt.
What does debt portability change for the consumer?
In addition to restricting interest on revolving credit, the law innovates by introducing the possibility of portability of the outstanding balance. Starting July 1, 2024, consumers will be able to transfer their credit card debt from one institution to another at no additional cost. This opens the door for users to seek more favorable conditions, enabling them to compare and choose financial institutions that offer lower interest rates. This aspect of the legislation encourages greater competition between banks and directly benefits the end consumer.
- Limiting interest on revolving credit to a maximum of twice the initial debt.
- The possibility of porting credit card debt between financial institutions free of charge.
This legislation is an important step in combating abusive interest charging practices and represents a significant victory for consumer rights in Brazil. It not only helps to avoid over-indebtedness but also promotes healthier and more conscious financial management.
