Check out how the credit card interest rate works

Anyone who uses a credit card should know that interest on operations is one of the main points of attention in relation to the payment method. This is said, as fees are often high, and can make the consumer face a snowball of debt.

In short, card interest is one of the main causes of default in Brazil. They represent 29.7% of debts, according to data from the 2021 Default Map, made by Serasa. Given this, see how the card interest rate works.

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Check out how the credit card interest rate works

In short, fees operate as a value that financial institutions charge for lending money to consumers. That is, when using the credit card, the customer asks the bank for a loan to make the purchase, instead of taking the amount out of his own pocket. Thus, if you do not pay the full amount of the invoice by the due date, the interest rate on the card begins to be charged.

The revolving credit card fee is calculated based on what was paid off the monthly bill within the allotted time frame. So, if the customer has an invoice of R$200 and was only able to pay 15% of the total, he will have to pay what was missing + a fee that can reach 16.9% per month. There is also a penalty for late payment, late payment interest, and the next installment of purchases for that month.

In view of this, check out the illustration of the Proteste (Brazilian Association for Consumer Protection) below: the invoice is R$ 1 thousand, and interest of 13%. When considering that the consumer paid only the minimum invoice, that is, R$ 150, R$ 850 remains for the next month. Thus, with the fees that apply, the consumer would need to pay R$ 1,986 at the end of the day:

  • Revolving interest: 850 x 0.13 = BRL 110.50;
  • Fine for late payment 2% (am) = R$ 17.00;
  • Interest on late payment 1% (am) = R$ 8.50.

In view of this, the amount payable next month: 1,000 (next invoice) + 850 (remaining amount of the previous invoice) + 110.50 + 17.00 + 8.50 = R$1,986.00. Therefore, the greater the debtor’s balance in the month, the greater the value of the final debt. This is said because the interest rate on the card accumulates.

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Image: Jirapong Manustrong /

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