Revolving bank card curiosity rose in August to 398% per 12 months, highest in 5 years

Information was released this Wednesday (28) by the BC. Interest rates have risen along with the Selic. Default is the highest since 2020; indebtedness hits record.

The Central Bank reported this Wednesday (28) that the average interest rate charged by banks in revolving credit card operations rose from 349.9% per year in July to 398.4% per year in August. This is the highest rate since August 2017 (428% per year).

The revolving credit card, whose demand in 2021 was the highest in ten years, can be activated by those who cannot pay the full amount of the invoice on the due date, but do not want to be in default.

This is most expensive line of credit on the market and, according to analysts, should be avoided. The recommendation is that bank customers pay the entire amount of the invoice monthly.

High Selic

Bank interest rates have increased in recent years, as a result of the increase in the Selic, the economy’s basic interest rate, by the Central Bank.

With this measure, the BC tries to contain the rise in inflation. Currently, the Selic is at 13.75% per year, the highest level in six years.

Last month, according to the BC, average bank interest with free resources in operations with individuals and companies reached 40.6% per year in August.

According to the institution, this is the highest rate since March 2018, when it totaled 41% per year, that is, in just over four years.

The average bank interest with free resources does not include the housing and rural sectors and the National Bank for Economic and Social Development (BNDES).

• According to the BC, the average interest rate charged on operations with companies fell from 23.4% per year in July to 22.8% per year in August.
• In operations with individuals, interest rose from 53.4% ​​per year in July to 53.9% per year in August, the highest level since April 2018 (56.3% per year).
• In the overdraft of individuals, the rate rose from 127.4% per year, in July, to 128.6% per year, in August. It is the highest rate since June this year (129.2% per year).

Bank credit

The total volume of bank credit on the market, according to the Central Bank, increased 1.6% in August this year, to R$5.06 trillion.

There was an increase of 0.9% in the corporate portfolio and an increase of 2.1% in that of individuals.

According to the institution, among the types of credit for families, in August, the following stand out: total credit card (+2.4%), non-consigned personal credit linked to the composition of debts (+6.7%) , non-consigned personal loans (+1.3%), payroll-deductible loans to public servants (+0.8%) and payroll-deductible loans to INSS retirees and pensioners (+1%).

In twelve months, the growth in the total volume of bank credit reached 16.8% in August, against 16.9% in July.

For the entire year, the Central Bank estimates an expansion of 11.9% in bank credit. In 2021, boosted by emergency lines of credit to combat the effects of the pandemic, bank credit rose by 16.5%.

BC data show that the granting of new bank loans also advanced in August, when they registered an expansion of 1.7% against the previous month.

This was the second month in a row that the indicator rose. The calculation was made after seasonal adjustment, a kind of “offset” to compare different periods.

Default and indebtedness

The average default rate recorded by banks in credit operations remained stable at 2.8% in August. Even though, remains at the highest level since June 2020.

In operations with individuals, delinquency rose from 3.6% in July to 3.7% in August — the lowest since May 2020 (4%).

Debt in companies, on the other hand, remained stable at 1.5% in August, the highest since August 2020 (1.8%).

On Monday, the Central Bank also released statistics on household indebtedness with banks. In this case, the new numbers refer to July this year.

According to BC, the indebtedness set a record in that month, adding up to 53.1% of the income accumulated in the previous twelve months. The BC historical series for this indicator starts in January 2005.

In February 2020, before the Covid-19 pandemic, household indebtedness was at 41.8%.

Source: G1