Brazil credit card interest rates reach 444.9% annually

Average interest rates for credit card revolving credit in Brazil rose to 444.9% per year in August, up from 436.2% in July, according to data from the Central Bank. The rate for installment plans also increased, rising from 189.3% to 192.1%.

Despite a law enacted in January 2024 that caps revolving and installment interest at 100% of the principal debt, the Central Bank notes these high figures are statistical extrapolations of monthly rates. Because consumers often carry balances for only days or weeks, the annualized rate may not reflect the actual cost paid by most users.

The Brazilian federal government is currently studying solutions to address what it describes as predatory credit offerings and record levels of consumer debt. President Luiz Inácio Lula da Silva has suggested discussions with the Central Bank regarding limiting the number of credit cards individuals can hold to prevent unsolicited distributions.