Revolving credit card: customers will be able to make free portability from July 2024

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The decision was taken last week by the National Monetary Council. According to the BC, from July next year onwards, credit card invoices should have more information. Customers with debt on their revolving credit card, the most expensive line of credit on the market, will be able to freely port their outstanding balance from one financial institution to another from July 1, 2024. The decision was taken last week by the National Monetary Council (CMN), a collegiate body formed by State ministers and the president of the Central Bank. “For example, you will look for a financial institution that offers you lower interest rates or better payment terms, and ask them for a proposal. With this in hand, you can check if the bank where you have the original debt wants to make a counter-offer” , informed the BC, through social media. Also last week, the CMN defined that the interest charged cannot exceed the original value of the debt from January onwards. In the case of credit card debt portability, it was defined: the proposal from the proposing institution must be carried out through a consolidated credit operation; The original creditor institution that makes a counter-proposal must present to the client, at least, a proposal for a consolidated credit operation with the same term as the operation proposed by the proposing institution, for purposes of cost comparability. If this happens, credit portability must be done free of charge. Interest on revolving credit cards will be capped Most expensive credit on the market In October, according to information from the Central Bank, the average interest charged by banks on revolving credit card operations totaled 441.1% per year. This is the most expensive line of credit on the market and should be avoided. Credit card revolving credit is used by those who cannot pay the full amount of the invoice on the due date. Interest on payroll loans, for example, totaled 24.6% per year in October, while the average rate charged to individuals totaled 57.3% per year. The recommendation is that bank customers pay the entire amount of their credit card bill monthly. In October, the volume of revolving credit offered by banks totaled R$65 billion, just over 10% of the total credit granted (with payroll deduction – which totaled R$624 billion. Due to the stratospheric interest rates charged by banks , the default rate on revolving credit cards, according to data from the BC, reached 55% in October this year. More transparency According to the BC, also from July next year, credit card invoices must pass to have the following information: a prominent area, where only the essential information for decision-making by the account holder should be: total amount; due date of the invoice for the current period and total credit limit; an area for payment alternatives payment, where only the information that allows the postpaid account holder to compare the options available to settle their debt must be contained; in this area, the following information must be exclusively included: amount of the mandatory minimum payment; value of charges to be charged in the following period in case of minimum payment; financing options for the outstanding balance of the invoice, presented in order from lowest to highest total amount payable by the holder; and effective monthly and annual interest rates, in addition to the Total Effective Cost (CET), relating to credit operations subject to contracting; an area with additional information, where information such as entries made to the payment account, by event, must be located; identification of contracted credit operations; values ​​relating to interest and charges charged in the current period; total value of interest and financial charges charged relating to contracted credit operations; identification of fees charged; closing date of invoice entries for the following period; identification of beneficiary end users; individual limits for each type of operation; total consolidated balance of future operations, in addition to others that the institution issuing the payment instrument deems appropriate. “The resolution also determines, for greater transparency of information, that establishments in which the card holder has made purchases are identified by their trade name on the invoice; and that installment payment transactions must be presented on the invoice within two business days from the opening date of the invoice for the period, with a view to greater clarity of future obligations for the holder of the post-paid payment account”, informed the Central Bank. It was also determined that credit card issuers must still send the account holder free of charge, through electronic channels, information about: the due date of the invoice, at least two days in advance, including clarifications that failure to pay the amount total invoice results in interest and charges being charged; the consequences of any non-payment of the mandatory amount indicated on the invoice, late payment, as well as guidelines for accessing information on the forms and options available for settlement, including in advance, and financing the outstanding balance of the invoice, from the business day immediately following the due date of the invoice; the beginning of any installment payment of the revolving credit balance and the corresponding invoice; the start of charging the annual fee, after any period of exemption from charging, if any, at least one month in advance from the start date of the charge.

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