Credit card interest rates reach 364% per year

The annual interest rate on revolving credit cards rose to 364% in April. This is the highest rate since August 2017. Last month, in March, the rate was 359,1%. The numbers are released by the central bank and serve as a warning to consumers that they should now use their credit cards with more caution.

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Why? Well, invoices that are not paid on time go to revolving credit. This is why interest rates are rising. By doing this, debt can actually snowball and take a toll on your entire household budget in a short period of time.

Credit card revolving interest

The revolving rate is one of the highest on the market, so it is ideal to avoid this line of credit whenever possible. Fees vary per month.

The positioning is that customers pay full invoices every month, avoiding loops. Otherwise, when the customer is unable to pay the bill within the credit card limit, the amount goes to the following month's bill. It is at this time that banks charge high interest rates because it gives more time to pay invoices.

Installment rates have also increased. It rose from 171,7% to 175,1%. Data released by the central bank also showed that the average annual interest rate for the credit business rose to 27,7% in April from 26,7% in March. Compared to the previous year, the increase was 7,3%.

April's results put credit card rates at their highest level in four years. At the same time, the country's default rates continued to rise due to high inflation and mass unemployment.

According to the agency, the increase in bank interest rates is a result of Selic. Brazil controls inflation by raising its base rate.