Revolving credit card interest rises to 455% per annum in May, the highest level in more than six years

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The average interest rate charged by banks on revolving credit card operations rose from 447.3% per year in April to 455.1% per year in May, the Central Bank reported this Wednesday (28). According to the institution, this is the highest level in six years. In March 2017, the rate was 490% per year, above the current rate. Credit card revolving credit is activated by those who cannot pay the full amount of the invoice on the due date. The level of the revolving interest rate remains prohibitive. This is the most expensive line of credit on the market and, according to analysts, should be avoided. The recommendation is that bank customers pay the entire invoice amount monthly. Loans granted through the revolving credit card to individuals recorded growth in 2022 and broke a record. Haddad’s criticisms In April, the Minister of Finance, Fernando Haddad, stated that he will negotiate with financial institutions a reduction in the interest rate charged on operations with revolving credit cards. “The drawing [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”, declared the minister, at the time. He informed that the reduction of interest on the revolving credit card is being discussed with representatives of the Brazilian Federation of Banks (Febraban). According to interlocutors in the financial system, the high fees charged on the card rotation are not a simple topic to be resolved. They say that the government and the banks are still far from reaching solutions. But they claim that some paths are on the radar, how to offer more affordable rates to punctual debtors, who are not habitual and who stay on the revolving for a short time. Representatives of financial institutions argue that the fact that consumers can pay in installments without interest, something that practically only exists in Brazil and that leaves the risk fully with the card issuer, contributes to the high fee charged.

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