Using Direct Consumer Credit (CDC) and payroll loans, without a doubt, is much better than using the revolving credit card. But we must not transform CDC and payroll-deductible payments into permanent debts to supplement income. Even with a more affordable Total Effective Cost (interest, fees and charges), these debts can contaminate the family budget.
The word credit, in finance, originally means the confidence to get back the money you borrow. These financial commitments should be exceptional measures, motivated by illness, unemployment or an urgent need to acquire a good or service.
More than 24% of families in Brazil had bills overdue last May, according to the National Consumer Debt and Default Survey, by CNC (National Confederation of Commerce of Goods, Services and Tourism). And 68% were indebted, the highest level in the historical series started in 2010. A situation that, obviously, worsened with the coronavirus pandemic, and with the acceleration of unemployment since 2015.
Another factor that weighs is the flattening of income. Matter of this leaf last April shows that 80% of families with monthly income above five minimum wages lost income in the fourth quarter of 2020 compared to the same period of the previous year. The data are from Pnad (National Household Sample Survey) Ongoing, compiled by IDados consultancy.
Unemployment, falling incomes and indebtedness form a vicious circle. In addition to the suffering of those directly affected, they delay economic recovery.
If the difficulties that lead millions of Brazilians to resort to payroll loans were not enough, there is also a need to deal with loans taken out without the client’s authorization. Complaints about this practice increased 266% in the first four months of 2021, compared to the same period last year, on the Reclame Aqui portal. At Procon-SP, in January this year, complaints about payroll increased 206% compared to that registered this month in 2020.
Anyone who has contracted this type of loan once, receives an avalanche of messages via WhatsApp and email, offering money. At the very least, a serial nuisance.
And the elderly have also suffered from payroll consignments, in which criminals pretend to call the INSS, and request documents to forge a loan.
Therefore, in addition to not using the CDC and payroll loans to increase your income —since they have interest and payment terms—, only do this type of transaction with the bank where you have a checking account, so as not to be targeted by scammers. What can be a good way out of certain financial difficulties should not become a habit.
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