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Brazilians Are Spending More Than Half Their Income on Debt Payments

An aggressive campaign of rate hikes is hitting consumption and choking off growth.
Nathalia Rodrigues

Nathalia Rodrigues

Photographer: Pedro Campos

Finance professor Claudia Yoshinaga asked her foreign students at the Getulio Vargas Foundation in São Paulo to guess the average interest rate Brazilian credit card issuers charge on unpaid balances. She instructed them to guess high. “Their wildest bet was 50%,” she says.

The correct answer: 346.3%. “I have students from the U.S., Belgium, Africa … and it’s unbelievable to them,” Yoshinaga says.