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Bill may offer great news for credit card users

Good news for credit card users may be on the way, with Bill 987/2023 pending in the House. The project proposed by Representative Arthur Oliveira Maia (União-BA), that the National Monetary Council (CMN) set a maximum interest rate applied by financial institutions in the revolving credit card.

According to the data of the Central Bank for the months of January and February 2023, the interest rate on the revolving credit card was approximately 994% annually, while the installments reached 671% annually. The bill proposes that the maximum interest on a revolving credit card cannot exceed the already set rate for overdrafts, which is currently 8% per month, or roughly 152% annually.

Initially, the maximum revolving credit rate will be around 150% per annum, which is a much lower limit than what is currently stated. However, the Food Manufacturing Network (CMN) may reduce this rate gradually, as economic conditions permit.

The proposal is still being analyzed in the Chamber of Deputies and, if approved, could represent a significant drop in interest rates for credit card users in Brazil.

Understand how revolving credit works

The credit card offers a credit option called “revolving,” which is for people who are unable to pay the full amount of the bill by the due date. This option acts as a loan granted by financial institutions, allowing the user to pay only part of the bill.

However, in recent months, interest rates for revolving credit cards have been very high. In January of this year, for example, and according to data issued by the Central Bank, the interest rate reached 411.5% annually, which is the highest level since August 2017, when it reached 428%.

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