Brazil closer to capping credit card interest

Wednesday, November 30, 2016

The Brazilian senate's economic affairs committee approved a bill this week to cap credit card interest rates.

Interest rates would be limited to a maximum of double the bank deposit certificate rate, known as CDI in Portuguese. It is is currently close to the country's key rate of 14.0%, meaning that annual credit card interest rates could not surpass 28%.

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The bill, which was authored by senator Ivo Cassol, will now be voted on by the full senate, according to local media reports.

Last week, the central bank released October credit data that showed the average interest rate on credit cards for the month was 475.8% per year.

BNamericas also reported earlier this month that a study conducted by consumer protection association Proteste found the country's average credit card interest rate to be the highest in Latin America, at 436% annually. That is about 10 times higher than in Peru, which has the second highest average at 43.7%.

The study also found that Santander Brasil's Santander Free card charges the highest interest rate in the world, at 1,158%.