Credit card debts grow at the highest value in 8 years with inflation and falling income

“There has come a point [em] I had to choose: pay the card or not eat”, says Damiana Araújo dos Santos, unemployed. “As I have two children, I’m sorry, I can’t let my children go hungry to pay for the card”, she says.

Cases like hers led the country to record the highest level of credit card debt in eight years, reflecting the population’s difficulty in staying in debt in a scenario of high inflation, compressed income and job search.

The so-called “revolving”, triggered when the consumer does not pay the complete bill of the card until the maturity, recorded R$ 159.3 billion in new loans in the first six months of the year. According to the Central Bank, this is the highest level for the period since 2014 – when BRL 174.7 billion were granted (in the series updated by inflation).

Santos says he has four cards and that they were mainly used to buy food at the supermarket. “I was buying in one, paying the minimum, moving on to the other, I couldn’t pay, I paid in installments, then it snowballed”, he says.

As for the volume of the debt, he says he has no idea of ​​the total and avoids answering the daily collection calls. “It must be a very high value on account of interest, but I can’t say,” she says.

Both the BC and finance experts recommend that the revolving credit card be used only in an emergency and for very short periods. With high interest rates, this is the most expensive line of credit on the market.

In June, revolving interest reached 370.4% per year. In the 12-month period, the increase in the average rate was 41.3 percentage points – well above the rise in the basic rate (Selic), which went from the historic low of 2% in 2021 to the current level of 13.75% at the end of the year. year.

Not even the increase in interest has stopped new loans in this modality, unlike in other periods. At least now the population is not indefinitely on the rotary.

Since April 2017, banks are required to transfer revolving debt to an installment credit line, which has lower rates, after one month.

Experts point out that the change in the rule mitigated the “snowball” effect, but that no one should aim to seek credit in installments because interest rates – although lower than the revolving loan – are also high. In June, the total average rate in this modality was 173.2% per year.

The BC warned in the minutes of the last Comef (Financial Stability Committee) meeting, released on Thursday (8), that the growth of credit in modalities with greater risks indicates a trend of increasing delinquency, albeit within historical standards. .

“In the case of families, the increase in problem assets has surpassed the growth of the loan portfolio. This trend should continue with the growth of credit in riskier modalities”, wrote the monetary authority in a note.

According to Ricardo Teixeira, coordinator of the MBA in Financial Management at FGV (Fundação Getulio Vargas), the loss of purchasing power in the face of high inflation is one of the factors for the increase in delinquency.

“During the period of the pandemic, many families went through difficulties, some people lost jobs, which also puts pressure on the domestic economy,” he added.

The specialist describes that many debts are contracted when there is a loan of credit to friends and family who are experiencing financial difficulties. “Even if that person pays the interest later, it’s the cardholder who is using the revolving card,” he said.

In the case of middle-class families, Teixeira cites the increase in expenses due to the “new normal”. According to him, with the home office and work in a hybrid format, families had higher expenses with food at home and equipment, and even saw their electricity bills rise. Household accounts were even more pressured in homes with children and teenagers, who began to take classes through digital platforms.

Amanda Rapouzo, director of Serasa eCred, highlights that “one of the biggest debts of Brazilians is with credit cards”. As for the profile of people with a negative name, she says that the largest portion is made up of young people aged between 25 and 35, with an income of one to two minimum wages, and an average expenditure of R$3,000.

According to Rapouzo, the best alternatives to escape the most expensive line of credit on the market are loans with a guarantee or an advance loan from the FGTS (Fundo de Garantia do Tempo de Serviço).

Indebted voters are in the crosshairs of candidates for the Presidency of the Republic in the 2022 election. The campaign of former president Luiz Inácio Lula da Silva (PT) prepares a program to enable the renegotiation of debts, such as electricity and water bills, of families low-income and middle-class population.

Ciro Gomes (PDT), who is in third place in the polls, maintains in his program a proposal presented in the 2018 campaign to clear the name of Brazilians from the SPC/Serasa, with lower interest rates and longer terms of payment. payment.