Credit card interest hits 350.79% per year

The average credit card interest rate hit 350.79% per year, according to a survey released today (Sep. 14) by the National Association of Finance Executives (Anefac). Per month, credit card interest rate stands at 13.37%, up 0.34 percentage point in August compared with July.

For overdrafts, the average annual rate stood at 218.17% (10.14% per month), a rise of 0.04 percentage points compared with July. In this modality of loan, the amount overdrawn must be within the authorized overdraft limit, which is set according to the customer's profile.

The overall average interest rate for individuals rose 0.08 percentage point between July and August, reaching 128.78% per year—7.14% per month. In addition to the credit card and overdraft, the survey also covers auto credit, bank personal loan, financial credit and trade interest.

For legal people, the overall average interest rate rose 0.03 percentage point and stood at 61.77% in August—4.09% per month. Rates of overdraft, trade bills discount and working capital loan were considered. The biggest rate was found in overdrafts, 6.99% per month.

According to Anefac, the interest rate was affected by the unstable economic environment, which raises the risk of delinquency. "This scenario is constructed by the fact that higher inflation rates, increased taxes and higher interest rates reduce household income. In addition to this, low economic growth may entail an increase in unemployment rates," reads the entity's note.

Translated by Amarílis Anchieta