Do credit cards ever make sense to use? As a general rule, I tell people never
…05 Aug 2010
Credit is not only bountiful in Brazil, but virtually free and democratic. It’s all thanks to interest-free payments — Brazil’s version of an installment plan
…Riding the credit wave, Brazilians are borrowing their way into a better future. Inflation is hovering around 4.5 percent, which Brazilians consider low compared with the whopping 2,500 percent inflation of 1993, a record year.
Banks guarantee payment to stores and take on all the risk in case consumers miss a payment. Yet, stores, consumers and banks have a common understanding: missing a payment’s due date will lead to painful interest rates, especially because Brazil’s interest rates are among the highest in the world. And consumers recognize they’re not always getting the best bang for their buck stores often charge more for products sold under installment plans.
With customers eager to buy more products on credit, retailers want to make sure they keep their clients happy by stretching the installment plans as far as they can.
In April 2010, consumer credit totaled $267 billion, representing an 18.2 percent annual increase, according to Brazil s Central Bank.
Casas Bahia, a successful chain of…
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Brazil: where credit grows on trees