High Selic makes revolving interest rates more expensive, says Corecon-SP counselor
The average default rate in Brazil reached 4.7% in May, the highest level since the beginning of the historical series, in 2011. The scenario worries experts, who point to the combination of high interest rates, growing debt and the advancement of bookmakers as determining factors for this result.
In an interview with CNN Money, Carla Beni, advisor to Corecon-SP (Regional Economic Council of the State of São Paulo), analyzed the economic context and highlighted that the country has been living with a double-digit Selic rate since February 2022.
According to her, this scenario directly puts pressure on the interest charged on credit card revolving credit, which reaches 436% per year - the most expensive and easiest modality for consumers to access.
Despite record default rates, the job market remains relatively buoyant. Carla Beni highlighted that Caged data points to an average starting salary of around R$2,400 for workers with a formal contract.
"This wage bill has been rising, but it is already rising a little less", he pondered.
For her, the fact that employment is still resilient is a factor that prevents an even more serious scenario: "Can you imagine if we had this whole default process with an even greater drop in jobs?"
Carla Beni also contextualized the absence of a legal limit for charging interest in Brazil. She explained that, since the 1988 Constitution, there was a ceiling of 12% real per year for the financial system. However, this limit was eliminated in 2003, following pressure from the financial sector that began in 1999.
"The sky is the limit", he summed up.
Currently, although there is a rule that prevents debt from doubling - that is, that prohibits the charging of more than 100% of the initial amount -, revolving interest rates still reach levels that she classified as part of the so-called "free market".
"We should think about putting a limit on this interest charge", he argued.
Regarding the debt renegotiation programs, Carla Beni assessed that Desenrola 1.0 had lower participation than expected, partly due to difficulties in using the application and the requirement of a financial education course as a condition for participation.
Desenrola 2.0 allows the consumer to negotiate directly with the financial institution, which should facilitate the process.
"The first one's turnout was lower than expected and the second one's turnout is now greater," he said.
The initial program lasts 90 days, with no extension announced so far.
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Source: CNN