The Central Bank (BC) informed this Tuesday (2), in Brasília, that the interest ceiling for revolving and installment credit card bills will come into force this Wednesday (3). According to the agency, the January 1st holiday postponed the entry into force of the measure by one day, which limited interest and charges on both types of credit cards to 100% of the total amount of the debt.
The deadline for the Desenrola Law, which established the ceiling for the two types of credit cards, would end on January 1st. With the holiday, the deadline for the presentation and approval of a self-regulation for the sector was this Tuesday (2). As there was no agreement on its own regulation, the ceiling will come into force on January 3rd.
Instituted by the Desenrola Program law, sanctioned in October, the ceiling was regulated at the end of December by the National Monetary Council (CMN). The law had established 90 days for negotiations between the government, the Central Bank, financial institutions, the National Congress and the Central Bank to arrive at a new model for the credit card rotation. Otherwise, the model in force in the United Kingdom would apply, which sets interest rates up to a ceiling of 100% of the total debt, which cannot rise again after doubling the value.
Shortly after announcing the CMN’s decision, at the end of December, the Minister of Finance, Fernando Haddad, highlighted that, during this 90-day period, financial institutions did not present any proposals.
Simulation
With the interest ceiling on the revolving and installment invoices, whoever does not pay a bill of R$100, for example, and pushes the debt to the revolving system, will pay interest and charges of, at most, R$100. This way, the debt cannot exceed R$200, regardless of the term.
According to the most recent data from the Central Bank, in November, interest rates on revolving credit cards were, on average, 431.6% per year. This means that a person who enters the revolving account with R$100 and does not pay off the debt will owe R$531.60 after 12 months.
Portability
In addition to making the interest ceiling official, the CMN instituted the portability of credit card outstanding balances and increased transparency in invoices, items that were not in the Desenrola law. These requirements, however, will only come into force on July 1st.
Through portability, the revolving debt and invoice installments can be transferred to another financial institution that offers better renegotiation conditions. The measure also applies to other postpaid payment instruments, types in which resources are deposited to pay debts already incurred.
The financial institution’s proposal must be carried out through a consolidated credit operation (which restructures the accumulated debt). Furthermore, portability will have to be done free of charge.
If the original creditor institution makes a counter-offer to the debtor, the consolidated credit operation must have the same term as the refinancing of the proposing institution. According to the Central Bank, equal terms will allow costs to be compared.
Invoice
From July onwards, credit card invoices must have a prominent area, with essential information, such as the total value of the invoice, due date of the invoice for the current period and total credit limit.
Invoices must also have an area where payment options are offered. In this area, only the following information must be specified: amount of the mandatory minimum payment; value of charges to be charged in the following period in case of minimum payment; financing options for the outstanding balance of the invoice, presented in order from lowest to highest total amount payable; effective monthly and annual interest rates; and Total Effective Cost (CET) of credit operations.
Finally, invoices will have an area with additional information. This field must contain information such as entries in the payment account; identification of contracted credit operations; interest and charges charged in the current period; total value of interest and financial charges charged relating to contracted credit operations; identification of fees charged; and individual limits for each type of operation, among other data.