Credit Card Payoff Time

Credit-card revolving debt: the most expensive credit in Brazil

Pay anything less than the full bill and the rotativo takes over: whatever you leave behind rolls forward at the steepest rate in the Brazilian market, averaging 431% per year in Jan 2024 (Bacen). Lei 14.181/2021 (Lei do Superendividamento) changed that somewhat, since the rotativo is now capped at 30 days. Once it expires the bank has to offer a parcelamento at 70% to 120% per year, still steep, though nowhere near the rotativo. The time to clear the balance comes from the same annuity inversion, n = -log(1 - i·PV/PMT) / log(1 + i). Pay less each month than the interest piling up and the debt simply never ends.

There are two well-known ways out. The snowball (Dave Ramsey) clears the smallest debts first, trading some math for early psychological wins. The avalanche goes after the highest rate first, which is the mathematically optimal play. In practice the cheapest route is usually to do both at once: move the rotativo over to a parcelamento or a personal loan, then pay things off in avalanche order. And if you can manage it, don't let a balance ride past a single cycle.

Applications

Personal debt diagnosis, deciding whether to migrate to a personal loan (consignado, FGTS-backed), prioritising debts in a multi-card scenario, and modelling renegotiation offers (parcelamento, Desenrola Brasil) before signing.

FAQ

Why is the rotativo so expensive? It is unsecured, short-term and bundles high default risk. Even after caps, it ranks among the world's most expensive consumer credit.

Should I pay only the minimum? Almost never — paying the minimum keeps the balance in the rotativo and at the 30-day mark the bank automatically migrates the debt to parcelamento, which is still costly.

Is a personal loan really cheaper? Usually yes. Credit consignado runs at 1.5-2% per month; even an unsecured personal loan rarely exceeds 8-10% per month — a fraction of the rotativo's 14-15% per month.