Key facts
- Alice de Queiros owes $1,500 on her credit card, which is nearly her entire monthly income.
- 82% of Brazilian households are in debt, and a third are behind on payments.
- Brazil's credit card interest rates can reach around 440% for revolving lines.
- Delinquency rates for neobank credit card borrowers rose to 20.31% in 2025 from 7.71% in 2021.
- President Luiz Inacio Lula da Silva and challenger Flavio Bolsonaro have proposed measures to curb household debt.
Millions of Brazilians are grappling with high levels of debt, largely fueled by aggressive lending practices from fintech and digital banks, according to a Reuters report. Alice de Queiros, a public servant, saw her credit limit significantly increased by Nubank in 2022, leading to a debt of $1,500, which now consumes nearly her entire paycheck.
This situation reflects a broader trend in Brazil, where a record 82% of households are in debt, and a third are behind on their payments. Experts attribute this to a "predatory lending model" where fintechs have targeted low-income customers, offering credit with little regard for repayment ability. Brazil's benchmark interest rate is currently 14%, and credit card rates can reach approximately 440% for revolving lines, significantly higher than in countries like the US.
While regulatory changes in the past decade aimed to increase competition and lower rates, fintechs have instead focused on expanding credit access to underserved populations. This, combined with the rapid digitalization of financial services and the expansion of Brazil's instant payment system, Pix, has led to tens of millions of Brazilians opening bank accounts for the first time. However, many were not prepared for the responsibility of managing credit.
Data from Equifax BoaVista shows a sharp increase in delinquency rates for neobank credit card borrowers, rising to 20.31% in 2025 from 7.71% in 2021, while rates at traditional banks have fallen. Both President Luiz Inacio Lula da Silva and his main challenger, Senator Flavio Bolsonaro, have proposed measures to address household debt, though the impact on fintech lending remains unclear. Brazil's central bank is also studying measures to tackle the crisis.