Brazil's consumer debt declines, trade organization reports
For the second consecutive month, the percentage of indebted families in Brazil declined, reaching 76.1 percent, according to the Consumer Indebtedness and Default Survey (Peic) by the National Confederation of Trade in Goods, Services, and Tourism (CNC). The January figure marks a 0.6 percentage point decrease from December and a 2 percentage point drop compared to the same period in 2024.
In January, 20.8 percent of Brazilians allocated more than half of their income to debt payments, the highest level since May 2024. On average, households spent 30 percent of their earnings on debt, up 0.2 percentage points from the previous month. The survey also indicated a rise in the perception of indebtedness, with 15.9 percent of respondents considering themselves “highly indebted”, up from 15.4 percent at the end of last year.
“High interest rates and selective credit are leading consumers to take on less debt. However, as a side effect, their perception of indebtedness is increasing. The slight improvement in default rates suggests that Brazilian households are striving to balance their finances, but the rising share of income committed to debt is a warning sign for the economy in 2025,” says José Roberto Tadros, president of the CNC-Sesc-Senac System.
According to the organization, this growing concern has contributed to a slight decline in the number of families in arrears, which fell to 29.1 percent in January from 29.3 percent in December. The percentage of those unable to pay their debts also dropped month-over-month, from 13 percent to 12.7 percent. Despite these improvements, both figures remain higher than in January 2024, when they stood at 28.3 percent and 12 percent, respectively.
“Although indebtedness has declined, debt payments are consuming a larger share of Brazilian families' income, especially driven by high interest rates and shorter repayment terms. This trend could keep default rates elevated in the coming months,” explains Felipe Tavares, chief economist at CNC.
The survey also examined indebtedness across income brackets. Among families earning more than ten minimum wages, the percentage fell by 0.8 percentage points to 65.3 percent, while for those earning up to three minimum wages, it declined by 1 percentage point to 79.5 percent, both compared to December.
The most vulnerable families—those earning up to three minimum wages—were the only group whose debt percentage increased compared to January 2024, rising from 79.2 percent.
Getting out of default, however, remains a slow process. The share of consumers with overdue debts declined only among those earning between three and five minimum wages, dropping from 28.1 percent in December to 27.5 percent. Over the past year, the only income group to see improvement was those earning five to ten minimum wages, where the default rate fell from 22.7 percent to 22 percent.
Credit cards remain the primary form of credit for consumers, representing 83.9 percent of all debtors, despite a 2.9 percentage point decline compared to the previous year. In contrast, personal credit has risen by 1.3 percentage points, reaching 10.9 percent, while credit card usage has grown by 0.6 percentage points since 2024, reaching 16.8 percent.
Despite recent improvements in indebtedness and default rates, CNC cautions that household indebtedness may increase again throughout the year. The rates are expected to begin rising in March, with an estimated 77.5 percent of Brazilian families in debt and 29.8 percent in default by the end of 2025.
"Economic pressure to rely on credit for consumption, combined with persistently high interest rates, will likely make financial management an even greater challenge for Brazilian consumers," stated economist Felipe Tavares.
