(Updates with companies’ comments)
SAO PAULO, Jan 26 (Reuters) - Brazil’s top monetary policy body approved on Thursday restrictions to revolving credit lines offered by credit card companies, in a long-expected move aimed at reducing interest rates for consumers.
The National Monetary Council said consumers could only use for one month the high-cost revolving credit lines that automatically finance consumers who do not pay their monthly bills in full.
In new rules that banks must adopt by April 3, the balance must be financed in installments with lower rates, the council decided.
Banco Bradesco SA, Brazil’s second-largest private-sector bank, praised the council’s decision, saying the new rules “will stimulate the adequate use of emergency credit lines such as the revolving lines.”
Credit card industry association Abecs said the restrictions on revolving credit lines and automatic availability of other forms of financing to consumers will potentially reduce delinquency rates and reduce interest rates. (Reporting by Cesar Raizer; Writing by Tatiana Bautzer; Editing by Chris Reese and Lisa Shumaker)