CNC research indicates a stable trend, but an increase in lower income segments is worrying
The proportion of families in debt in the country remained at 77.4% in September, the same result as in August, according to Peic (Consumer Debt and Default Survey), from the CNC (National Confederation of Commerce in Goods, Services and Tourism).
The number represents the lowest volume of debt since June 2022. For the entity, the result indicates a trend of stability in household debt.
The research shows that the level of families who declared that they had debts due on credit cards, special checks, store vouchers, payroll loans, personal loans, post-dated checks, car or house payments remained stable.
Despite this, the analysis of income groups indicates an increase of 0.3 pp (percentage point) in debt among lower-income consumers among families that earn up to 3 minimum wages compared to September 2022.
According to the CNC, the behavior indicates “persistent challenges in this segment”. The entity highlighted that these families will have their CPFs deactivated starting this month, because of the federal government’s Desenrola program.
“Debt, in itself, is not synonymous with a financial problem, unless it is linked to default, which is also on the rise in the lower income bracket, with 38.6% of these consumers admitting to having overdue debts”, says the entity. According to the CNC, the level represents an increase of 0.7 pp in the month. It is the same percentage as September last year and the highest level since November 2022.
The survey also showed that 18.3% of these consumers say they are unable to pay their debts from previous months. The percentage is the highest in the historical series of this indicator.
General stability
The president of the CNC, José Roberto Tadros, assessed that the general stability of family debt in the country is important for the construction of a favorable economic scenario, but the increase in the index in the lower income brackets and the tendency for increase in defaults among these families.
For the president, high interest rates on credit cards remain a challenge in what is the main type of debt for Brazilians and essential for commerce and services.
“An unprecedented survey by CNC revealed that 90% of retailers’ revenue comes from interest-free installment purchases on credit cards, at least partially, which also highlights the inclusion of middle and low-income people in the consumer market.”, he stated, in a text published by the entity
Tadros defended the need to maintain interest-free installments, “sin intervention in market conditions, in addition to the rationalization of the revolving interest rate”.
credit card
Among those in debt, 86.2% of the total have bills to pay with credit cards, which is still the predominant modality. The percentage means an increase compared to September 2022, when it increased 0.6 percentage points.
Peic also showed that interest on the card’s revolving card reached alarming levels, averaging 445.7% per year. It is the biggest increase among all types of debt. Data from the Central Bank indicate an increase in the granting of credit on cards in relation to August 2022. The increase is 10% in cash payments and 28% in installments.
Among middle- and low-income consumers, credit card debt increased by 0.3 pp compared to September 2022, but among high-income consumers it fell by 0.3 pp. “During the month, however, the use of the card resulted in an increase in the volume of debt in all income groups”, said the CNC economist responsible for Peic, Izis Ferreira.
During the year, there were differences in the use of this type of payment. While among men it rose 1.5 pp, among women it fell 0.5 pp “They, in turn, claim to opt for payroll-deductible debt, a modality with lower interest rates, and are looking for alternatives outside of traditional credit lines.”, said the economist.
Both men (2.3 pp) and women (1.8 pp) managed to reduce their annual debt. However, during the month, the proportion of men in debt fell slightly (0.1 pp), and that of women remained stable, at 79.1%. “In terms of difficulties in paying off debts, a slightly higher number of women (30.6%) report facing problems compared to men (29.6%)”, concluded the CNC.
With information from Brazil Agency.
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