After two consecutive months of decline, the average interest rate on revolving credit cards increased by 9.4 pp (percentage points) in March, reaching 421.3% per year. The data is contained in the Monetary and Credit Statistics released this Tuesday (3) by the Central Bank (BC), in Brasília.
The revolving credit lasts 30 days and is taken by the consumer when they pay less than the full amount of the card bill. In other words, you take out a loan and start paying interest on the amount you were unable to repay.
According to the BC, even with the entry into force, in January, of the law that limits revolving interest to 100% of the debt value, the measure does not affect the interest rate agreed at the time of granting the credit. As it only applies to new financing, there was no impact on the March statistical calculation.
As a result, the average interest rate on credit with free resources to individuals was 53.4% per year (per year), an increase of 0.8 pp in the month and a decrease of 5.2 pp in 12 months.
In addition to the increase in revolving credit, the result of credit with free resources to individuals was mainly driven by increases in the average rates of non-conducted personal credit (4.5 pp), as well as the installment credit card (1. 7pp).
free credit
The Central Bank reported that the balance of free credit to individuals grew 0.4% in March and 8.2% in 12 months, with emphasis on the increases in financing portfolios for the acquisition of vehicles (1.5%), non-consigned personal credit (1.4%) and consigned credit for INSS beneficiaries (1.2%).
“It is worth noting that the growth observed in the free credit portfolio for families was concentrated in non-revolving modalities with increases of 0.8% in the month and 9.0% in 12 months. In the opposite direction, in the rotational modalities, there was a monthly drop in the portfolio of 0.7% and an increase of 6.0% compared to March 2023”, informed the monetary authority.
Family debt was 47.9% in February, a drop of 0.1 pp compared to the previous month and 0.8 pp in 12 months. Income commitment remained at 25.7% in February, remaining stable and revealing a drop of 1.7 pp in 12 months.
In operations with companies, the average rate reached 20.9% per year, a monthly decline of 0.5 pp in March and 2.9 pp compared to the same period of the previous year. Basically, the monthly drops in the average rates for discounts on trade bills and other receivables, of 1.1 pp, and working capital with a maturity of more than 365 days, of 1.2 pp, contributed to this result.
Balance of operations
The balance of credit operations in the National Financial System (SFN) totaled R$5.9 trillion in March, with monthly growth of 1.2%. This result arises from increases of 2.0% in the balance of credit operations to legal entities and 0.7% in that of individuals, totaling R$2.3 trillion and R$3.6 trillion, respectively.
Default rates in the National Financial System’s total credit portfolio stood at 3.2% in March, showing stability in the month and in 12 months (-0.1 pp).
By segment, default rates changed negatively by 0.1 pp, both in operations agreed with companies and families. On the other hand, in 12 months, defaults showed different behaviors, with an increase of 0.4 pp in operations for the business segment and a reduction of the same intensity in those carried out with families.
