Family Debt: Analysis of the Impact of Rotative Credit and Credit Cards

During a recent conference, President of the Central Bank (BC), Gabriel Galípolo, highlighted significant issues regarding family debt in Brazil. According to BC analysis, the main concern is not overall household indebtedness but rather unsecured credit, such as rotative credit and credit cards, which carry higher interest rates, often reaching 15% per month, making them less sensitive to monetary policy. This situation is influenced by global trends, including the increased use of credit cards after the pandemic and the promotion of financial inclusion through Pix. The BC also points out that these debts require deeper study to understand the challenges associated with family indebtedness in the country. Additionally, Galípolo addressed the difficulties faced by small and medium-sized enterprises (SMEs) in obtaining more affordable financing due to guarantee structures. However, there has been a growth in capital markets that have helped expand access to credit for these more constrained business segments.