High interest rates and increasing debt are making it difficult for Brazilian households to renegotiate their debts and are worsening their financial situation.

According to the Consumer Indebtedness and Default Survey (Peic), conducted by the National Confederation of Trade in Goods, Services and Tourism (CNC), default hit a record high in September, reaching 30.5% of Brazilian households. This is the highest rate since the survey began in 2010. According to the CNC, households committed an average of one-third of their monthly income to debt repayments.

Around half of indebted families, equivalent to 48.7%, have been in default for over 90 days. These figures highlight the deterioration of the population’s financial situation and emphasise the severe cumulative effect of high interest rates, making it increasingly difficult to restore balance to household budgets.

Prolonged delays in debt repayments demonstrate not only the financial burden of credit rates, but also the growing difficulty of renegotiation as the total amount owed increases rapidly due to additional charges and fees.

Credit card defaults

With rising interest rates and increasing household debt, the default rate on revolving credit cards has exceeded 60%, revealing that most consumers are unable to pay their debts on time.

According to data from the Central Bank, the total amount borrowed in this way reached 79.4 billion reais in August, which is a 30.8% increase compared to December 2024. This percentage is much higher than the average 7% increase in total credit observed in the same period.

This scenario highlights the growing financial vulnerability of Brazilians. Faced with pressure from interest rates and limited access to more affordable credit, many consumers end up in an even worse financial situation, making debt repayment a constant challenge.

Original Story: Veja Negócios | Author: Carolina Ferraz
Edition and translation: Prime Yield