Credit card market grows 30.9% in four years

The term "debit balance" refers to the unpaid amount of a purchase, whether in installments or not, on which interest may be charged.

As the number of financial institutions issuing credit cards to customers increases, there is a noticeable trend towards the use of more expensive credit card options.

The data reveal that 54 percent of customers have debit balances with only one institution, while 25 percent have balances with two institutions, and 20 percent with three or more. This highlights the correlation between the number of credit card ties and higher average debt balances. According to the Central Bank, customers who use cards from multiple institutions tend to increase their spending capacity through additional credit limits, resulting in higher consolidated debit balances.

Additionally, data from the Brazilian government´s statistic agency IBGE and the Brazilian Payment System indicate that in June 2022, the number of credit cards (190.8 million) represented nearly double the economically active population of Brazil (107.4 million) in 2021.

The Central Bank views the expansion of the credit card market as a positive development in terms of financial inclusion. However, it also warns that this growth has the potential to escalate household debt levels. Failure to pay the full credit card bill results in the remaining amount being treated as a loan, known as revolving credit card debt. This is one of the credit operations with the highest default rates and costs in the market, as outlined in the report.