Brazil’s Central Bank says household debt hit a record 49.9% of income, but leaves bets out of the picture

The Banco Central do Brasil’s September Monetary Policy Report puts household debt and debt-service burden at record highs, with the central bank pointing to expensive credit rather than betting as the driver. For PSPs, acquirers, and lenders in Brazil, the useful bit is not the political backdrop — it is that the regulator is now openly focusing on “aggressive” and even “predatory” credit design.

1. The report, released on Thursday (24) by BC president Gabriel Galípolo and director Paulo Picchetti, says household indebtedness reached 49.9% of income in January, the highest level in the series, and has stayed broadly stable since then. The share of income committed to debt payments hit 28.9% in June, also a record.
2. Delinquency is also at record levels: 4.9% in the National Financial System in July, and 7.8% in free credit to individuals. The BC says the main causes are inside the credit market itself: broader bank access, technological innovation, and a favorable labor market expanded household borrowing, then higher rates during the tightening cycle and stronger demand for emergency credit pushed the burden up further.
3. The composition of lending matters here. In the quarter ended in July, free credit grants to individuals fell 1.3%, dragged down by declines in longer-term products, while revolving card credit, installment card credit, and overdraft facilities kept growing. That is the expensive end of the market, and the BC is clearly watching it.
4. The report also includes a technical caveat that matters for anyone reading delinquency data too literally: the BC estimates that about 40% of the increase in the delinquency rate between December 2024 and June 2026 comes from the accounting changes introduced by CMN Resolution 4.966, in force since January 2025. In other words, part of the rise reflects reporting rules, not just weaker borrowers.
5. In the presentation of the report, Galípolo said the BC is concerned about “aggressive” and even “predatory” credit supply. He singled out revolving card credit, saying it has 65% delinquency among individuals and calling it a product with a “design problem.” He added that the BC will act whenever it identifies predatory supply.