Credit card interest: revolving debt, installments and what the CET really measures

What happens when you do not pay the full invoice

The revolving balance is not a loan you apply for, it is whatever is left over when you pay less than the full invoice but at least the minimum required. The bank covers the gap automatically and starts charging interest on it from the day after the due date, with no grace period at all. Unlike a personal loan, there is no credit check or signed contract at that moment: the line already exists inside the card’s limit, ready to be used the instant the bill goes unpaid in full.

The "minimum payment" printed on the invoice is no longer a single percentage fixed by regulation, each bank sets its own criteria, but in practice it tends to be the larger of a percentage of the balance (historically a 15% reference point) and a floor in reais. Paying exactly that minimum keeps the card "current" with the bank, but leaves most of the debt accruing interest into the next month. That is exactly the mechanic the credit card calculator simulates: it uses a floor of R$50 or 15% of the balance, whichever is larger, as its reference to project how long the revolving balance would take to clear on minimum payments alone.

Revolving balance (rotativo)

The part of the invoice not paid in full, automatically financed by the bank at high interest until the next due date.

Invoice installment plan

A separate credit line with fixed installments and interest usually much lower than the revolving rate, offered once the balance goes unpaid for more than 30 days.

Minimum payment

The smallest amount that avoids formal default; set by each bank, usually the larger of a percentage of the balance and a floor in reais.

CET

Total Effective Cost: the annualized rate that adds interest, IOF, fees and mandatory insurance, the number that represents a loan’s real cost.

IOF

Tax on Financial Operations, charged on revolving and installment credit card balances; it sits outside the 100% charge cap.

Why the revolving balance is among the country’s most expensive credit

Every month, in its Monetary and Credit Statistics report, the Central Bank publishes the average rate charged in each free-market credit modality in the country. Month after month, the credit card revolving balance sits at the top of that list, ahead of the overdraft line (cheque especial), unsecured personal loans and every other consumer credit line. The reasons are structural: it is unsecured credit, the bank has no idea whether it will last days or months, and people who end up in the revolving balance are, on average, already in tighter financial shape, which raises the default risk baked into the price.

The Central Bank itself flags an important caveat about these figures: the published rate is a monthly rate extrapolated to 12 months, a statistical convention used to compare modalities, not a forecast of what any one person will actually pay. Most people stay in the revolving balance for a few days or weeks, not a full year, so the cost actually paid tends to land well below the annualized headline. The catch is that if the debt is not resolved, that same monthly rate keeps compounding, month after month, on a balance that already includes last month’s interest, the same interest-on-interest mechanic explained in the compound interest guide and visible in the compound interest calculator, and that is where the revolving balance stops being a one-off inconvenience and turns into a hole that deepens on its own.

The 30-day rule: why installment plans exist

Until 2017, it was possible to sit in the revolving balance indefinitely, paying the minimum month after month while compound interest grew with no time limit. Resolução CMN 4.549, dated January 26, 2017 and in force since April 3 of that year, changed that: a credit card balance can only stay in the revolving line until the next invoice’s due date, at most 30 days. Once that window closes, the cardholder effectively has two paths: settle the overdue invoice along with the revolving interest already accrued, or accept an installment plan the bank is required to offer, on terms better than the revolving line, including the financial charges.

It matters to understand what this obligation covers and what it does not. The bank must offer the installment plan, on terms more favorable than the revolving line, but the cardholder is not required to accept it, they can choose to pay the full invoice instead. The rule also does not set a fixed number of installments or a specific rate: each institution designs its own installment product, as long as it is demonstrably cheaper than leaving the debt in the revolving line.

1. December 6, 2007First rule requires disclosing the CET

   Resolução CMN 3.517 creates the requirement to disclose the Total Effective Cost on credit operations with individuals. Since revoked and replaced.

2. January 26, 2017 (in force April 3, 2017)Resolução CMN 4.549: revolving line capped at 30 days

   The balance can no longer sit indefinitely in the revolving line; the bank must now offer an installment plan once that window passes.

3. December 23, 2020 (in force February 1, 2021)Resolução CMN 4.881 replaces the CET rule

   Becomes the rule governing how the CET is calculated and disclosed, revoking Resolução 3.517/2007. It is still in force today.

4. October 3, 2023Law 14.690/2023 creates the Desenrola Brasil program

   Creates the legal basis to cap interest and charges on credit card revolving and installment debt.

5. December 21, 2023 (cap in force January 3, 2024)Resolução CMN 5.112 regulates the 100% cap

   Interest and charges on revolving and installment credit card debt are now capped at 100% of the original amount.

The 100% cap: how far the debt can grow

The 30-day rule limits the time, but before 2024 it did not limit the amount: a debt forgotten in the revolving line for several months could, in theory, triple or quadruple from compound interest alone. Law 14.690/2023, which created the Desenrola Brasil program, changed that by setting a ceiling on credit card charges, regulated by Resolução CMN 5.112, dated December 21, 2023. Since January 3, 2024, interest and other charges, late fees and default interest included, on a revolving or installment credit card balance can no longer exceed 100% of the original debt. In practice, the debt can at most double: someone who owed R$1,000 on the invoice will not pay more than an additional R$1,000 in interest and charges, capping the total at R$2,000.

One relevant exception: the cap covers interest and fees, but not the IOF (the federal Tax on Financial Operations), which still applies on top. That is why the CET calculator adds IOF separately to the total cost: even with the 100% interest cap in force, the tax can still push the final cost a bit past the doubled debt.

CET: the metric that actually compares revolving debt and installments

Comparing two credit modalities by nominal interest rate alone is misleading: it only shows the contracted interest, leaving out everything else that also comes out of your pocket. The Total Effective Cost, regulated today by Resolução CMN 4.881, dated December 23, 2020 (which replaced the original 2007 rule), requires the institution to disclose a single, annualized rate that adds the interest to the IOF, administrative fees and any insurance required as a condition of the loan. That is the rate, computed as the Internal Rate of Return of the cash flow between the amount disbursed and the installments actually paid, that the CET calculator returns.

That is why two installment offers with the same nominal interest rate can end up costing quite different amounts in practice: the one that charges a setup fee or bundles in mandatory insurance has a higher CET, even while advertising "the same interest rate." When deciding whether to stay in the revolving line, accept your own bank’s installment plan, or look for another credit line to pay off the card, the CET of each option, not the headline rate, is the comparison that matters.

Worked example: R$1,000 in revolving debt vs. a 6-installment plan

Consider a R$1,000 invoice not paid in full. Converting the annual rate range the Central Bank has published for the revolving line (roughly 428% to 452% a year between September 2025 and April 2026) into its equivalent compound monthly rate, the same logic the credit card calculator uses internally, lands close to 15% a month. Assuming a minimum payment of 15% of the updated balance (or R$50, whichever is larger, as in the earlier example), here is how the first three months play out:

In three months, R$505.95 has already left your pocket, more than half the original debt, while the balance dropped from R$1,000.00 to just R$934.01: a reduction of under R$66.00. That is the revolving trap in a nutshell: since the minimum payment is almost entirely eaten by that month’s own interest, the debt shrinks slowly while the total paid climbs fast. If this pace continued for many more months without the debt being resolved, the 100% cap from Resolução CMN 5.112/2023 would kick in as a final backstop: at most another R$1,000.00 in interest and charges (IOF aside) on top of the original R$1,000.00.

Now compare that to an installment plan. Since the installment rate varies by bank and by campaign, the example below uses a hypothetical rate of 9% a month, plausible and clearly lower than the revolving rate, for comparison purposes only, not necessarily the rate your own card would offer. A fixed credit card installment uses the same amortization system as a traditional loan, the Price table, compared in detail in the SAC vs. Price guide. The formula is:

With P = R$1,000, i = 9% and n = 6, the installment comes out to R$222.82. Across the six installments, the total paid is R$1,336.92, of which R$336.92 is interest. In other words: the total cost of clearing the entire debt in six fixed installments (R$336.92 in interest) is less than what had already been paid in just three months of minimum payments on the revolving line (R$505.95), and by the end of the six installments the debt is fully paid off, not sitting at R$934.01. The credit card calculator reproduces this exact comparison, month by month, with your own numbers.