New law approved by Lula changes the functioning of credit cards throughout Brazil

Thinking about benefiting millions of Brazilians who buy with credit cards, President Luiz Inácio Lula da Silva approved a new law that limits interest and allows debt portability. The regulation provides relief for retirees and workers who suffer from high revolving credit rates.

The law should limit the collection of credit card interest, considered one of the highest in Brazil, and fees for customers. It will come into effect on July 1, 2024. Fees have led many citizens into over-indebtedness, a problem that is in the sights of the Federal government in recent months.

In addition to the new regulations, the Lula Government has presented several measures to reduce the number of people with bad names. Between them, the program unfolds, which offers debt renegotiation in up to 60 installments. Specialist Laura Alvarenga explained the rules of Desenrola Brasil in detail. Check out.

Main changes in how credit cards work

• Measure is already in force and aims to regulate the interest limit and financial charges on revolving credit;

• From now on, credit interest cannot exceed twice the original debt;

• This means that if a consumer has a debt of R$50, the maximum amount to be charged, with interest and charges, cannot exceed R$100;

• Measure should benefit millions of Brazilians who use credit cards;

• Furthermore, citizens will also be able to carry out free debt portability. In other words, they will be able to transfer the debt to another financial institution that offers better payment terms;

• To complete the operation, the proposal will need to be offered through a consolidated credit operation;

• Furthermore, the bank where the debt was incurred will have the right to make a counter-offer to the customer;

• Although, the final decision is up to the consumer.

When does the new credit card law come into effect?

The regulation comes into force from July 1, 2024. Consumers will be able to transfer their credit card debt from one institution to another at no additional cost. Furthermore, the legislation fuels competition between banks and directly benefits the end consumer.

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