posted on 09/06/2021 06:00 / updated on 09/06/2021 07:54
Credit card in action at the supermarket: for the consumer, the risk is to see the debt turn into a snowball – (credit: Fernanda Fernandes/Esp. CB/DA Press)
Brazilian families continue to be highly indebted and the default scenario continues at the same pace. This is what the most recent survey released by the National Confederation of Commerce in Goods, Services and Tourism (CNC) points out, which brings a new record in the number of indebtedness in August, 72.9%. The percentage corresponds to 11.89 million families with some outstanding debt.
The consumer debt and default survey (Peic) points out that a large part of household debt, around 83%, is concentrated on credit cards. This is because, in lower-income households, credit has even been used to purchase essential items such as food. “With the high inflation on essential items in the consumption basket of low-income families, (families) end up taking space from the budget and getting more indebted to consume essential items, such as food. The money is not coming to the end of the month and people are using their credit card to cover it”, explains Izis Ferreira, the researcher responsible for the CNC survey.
Secretary Maria Rosa Tavares Oliveira, 39, illustrates this scenario well. She says that, due to the need to use eight medications a day, she needs to use credit for other basic expenses. “There are months that there is no way, you have to use your credit card. Then the invoices eat a good part of my salary. Almost 30% of the income from my house is going to pay bills”, laments the resident of Gama.
Caregiver Rosilene de Souza, 46, a resident of Paranoá, also vents. “Even with the help of my family, I often end up using my credit card to make the purchase of the month. The problem is that it seems like a dead end, it seems that the bill increases more with each passing month”.
Salvation of the informal
In Peic’s analysis, CNC points out as the main factors for high maintenance of household indebtedness the expansion of access to credit, the high unemployment rate and high inflation. In the assessment of the president of the class entity, José Roberto Tadros, a large part of the debt is owed to informal workers who resort to credit to invest in small businesses. “But there is a great need for family budget planning so that this relief does not turn into an even bigger problem than what was initially a snowball”, he warns.
The survey data show that access to credit by consumers reached 19.2% in the first half of 2021. The rate is the highest since the beginning of 2013. More accessible credit, with lower interest rates, contributed to the increase indebtedness, which was also accompanied by high inflation. The data show that, since November, when it was at 66%, indebtedness has risen consecutively.
Financial institutions have increasingly made credit available to the population. The digital bank Nubank, for example, recently announced the extension of the credit card limit to 35 million customers in the next 12 months. The president of Caixa, Pedro Guimarães, also announced, at the end of August, the launch of a new line of credit, which should serve 100 million people, “the largest credit operation in the history of Brazil” and “revolution in the financial market “, in the words of Guimarães.
It is worth noting that most large supermarkets currently operate their own credit products for exclusive purchase at accredited establishments. This is the case of Grupo Pereira, which manages three major supermarket brands in the country and which, about three years ago, launched the Vuon Card. According to Rafael Souza, the product’s Business Director, the increase in the use of credit indicated by CNC reflects the demand for the card.
“We have had very strong growth. The supermarket segment, being an essential service, had little impact from the pandemic, and the card had greater demand in the period”, informs the director. Souza explains that bureaucracy is minimal for consumers who want to make a group card. “It is enough to present RG and CPF and, in less than an hour, the analysis is done. The idea was precisely that it would be a product accessible to all consumers.”
One of these consumers is Manoel Gilmar Mendonça, 46 years old. He says that he usually buys on credit most of the time and that the card for exclusive purchase at the supermarket has already saved him in various situations of hardship. “The card helps because sometimes there is something missing at home, milk, and you don’t have money, but you have the card that allows you to buy it”, says the watchman, a resident of Ceilândia.
With more access to credit and an increase in the percentage of indebtedness, the Minister of Justice and Public Security, Anderson Torres, reinforces that the federal government has invested in actions to help Brazilian consumers avoid over-indebtedness. “The government has invested in strengthening financial education through courses offered by the Ministry of Justice and Public Security. In addition, we work on the regulation of the Super-indebtedness Law, which gives Brazilians in good faith a space to renegotiate their debts,” he told Correio Braziliense, referring to Law 14.181/2021, which increases the protection of consumers with many debts and creates mechanisms to contain harassment by financial institutions.
In comparative law, a person who has committed more than 50% of his/her monthly income to debt is considered over-indebted. And although there is no official number of over-indebted in the country, it is likely that most of these people are on Serasa’s Default Map, which registers 62.5 million Brazilians with restricted CPF. The latest Peic points out that 25.6% of the total of families indebted in August are in default. The number remained stable compared to July, but presented a slight drop of 1.1% compared to August last year.
The National Consumer Secretary, Juliana Domingues, defends access to credit. In her assessment, in addition to moving the economy, credit grants purchasing power to part of consumers who would not have this condition. “The problem is not access to credit, but access to credit in a non-responsible way.” For Domingues, it is necessary to be careful with the false impression that the card can generate, making the consumer forget that it is a loan. “You have to have financial education. Many times, the person uses the card improperly, without really observing the effects, the bank interest and that, with the card, it can’t control your account better”, he warns.
For Roberto de Góes Ellery Júnior, a professor at the University of Brasília (UNB), the main problem of over-indebtedness is, yes, in the granting of credit, often well above the consumer’s income. “Credit is fundamental for the good performance of an economy, but it can be dangerous when it is granted beyond the consumer’s capacity to pay”, says the professor. For him, indebtedness to pay current expenses, such as food, lights up a yellow signal that warns of a future crisis. “If it is seen as a way for families to protect consumption from a temporary drop in income due to the pandemic, it is not a problem, but, over time, this reading becomes less likely. Encouraging indebtedness beyond the ability to pay can postpone a crisis, but when it happens, it will be worse than it would have been if it had not been postponed”, reinforces the professor.
Juliana Domingues recalls that consumers seeking financial education have free courses available through the National School of Consumer Protection, from the Consumer Defense Secretariat (Senacon), linked to the Ministry of Justice. “Consumers who have financial education problems can access tips to get out of the red, change consumption habits, dominate consumption emotions, learn about household budgeting and financial planning”, he explains. The courses are permanent, can be done at a distance, are certified by the University of Brasília and are open until September 27th. (Bernardo Lima collaborated)