BC president talks about extinguishing credit card rotation and creating installments with lower interest rates

[ad_1]

Mechanism would charge extra fee to discourage use, says Campos Neto; interest would be around 9% per month. Today, revolving credit charges 15% monthly interest, a unique level in the world. ‘Not having revolving interest on the card is a good way out’, says Dario Durigan – which occurs when the customer does not pay the full amount of the invoice and transfers the debt to the following month. According to data from the BC itself, credit default reaches around 50% of operations – an unprecedented rate in other countries. This Thursday, Campos Neto said that an alternative would be to extinguish the card’s revolving credit, activated automatically on the outstanding balance. Interest on this type of credit is considered abusive by specialists – in June, it reached 440% per year, the highest rate in the financial market. According to the Central Bank, this level is equivalent to an interest rate of 15% per month. Also according to Campos Neto, replacing the revolving loan, the Central Bank is considering sending the debtor directly to pay in installments for that balance – with interest of around 9% per month, just over half of the current 15%. “The solution is on the way so that there is no more revolving credit, that the credit goes straight to installments. That it be a rate around 9% [ao mês]. You extinguish the rotary. Who does not pay the card, goes straight to installments around 9% [ao mês]”, declared Campos Neto. Campos Neto also mentioned BC’s discomfort with the current credit card financing system, which allows account holders to purchase installments in up to 13 interest-free installments. This modality does not exist in the rest of the world either. “It’s like if it were a long-term interest-free financing”, assessed the president of the Central Bank. According to him, the BC is studying to create some kind of “tariff” to discourage unbridled purchases on credit in a very large amount of installments – which, frequently, it leads the buyer to lose control of his own invoice. “It is not prohibiting interest-free installments. It’s just trying to make you a little more disciplined. It will not affect consumption. Bearing in mind that credit cards account for 40% of consumption in Brazil”, explained Campos Neto. Delinquency on credit cards in installments hits record Another alternative, still according to the head of BC, would be to limit interest on revolving credit cards. This scenario , however, could lead banks to withdraw credit from account holders with “greater risk” of not honoring the invoice, which would harm consumption and retail. Campos Neto informed that the Central Bank’s proposal for the revolving credit card should to be presented in the coming weeks. According to him, there is a bill linked to Desenrola, which is refinancing debts of defaulters, which has a period of up to 90 days to be presented. Minister of Finance In April, the Minister of Finance, Fernando Haddad , stated that it would negotiate with financial institutions a reduction in the interest rate charged on operations with the revolving credit card – the most expensive line of credit on the market. [do crédito do cartão rotativo] is hurting the low-income population a lot. A good part of the people who are at Serasa today are on account of their credit card. Not only, but it is also by credit card. And people can’t get off the rotary. It is necessary to find a negotiated way as we did with the reduction of the retirees’ payroll”, he declared, at the time.

[ad_2]

Source link