BRASILIA, Aug 10 (Reuters) - Brazil's central bank governor Roberto Campos Neto on Thursday announced plans to unveil within the next 90 days a solution aimed at tackling high rates charged on revolving credit card lines, seeking to effectively end this credit modality.
Addressing a Senate hearing, Campos Neto said that the discontinuation of the revolving credit card mechanism would lead consumers who fail to settle their credit card bills to be automatically transitioned into a structured installment scheme, featuring interest rates hovering around 9% per month.
Additionally, he mentioned the imposition of a fee intended to disincentivize long installments.
Campos Neto acknowledged that revolving credit card rates are elevated, as well as defaults in this category, representing a pressing concern in Brazil.
The revolving credit card interest rate in Brazil is 437.3% per year, according to the latest data from the central bank, by far the most expensive type of credit for individuals.
Consumers bear this fee when they do not pay the entire credit card bill, with the remaining amount subject to interest. The central bank established in 2017 that consumers are restricted to a maximum of 30 days on the revolving credit card line.
(Reporting by Marcela Ayres; Editing by Andrea Ricci)
