Direct Consumer Credit: what it is and how it works?

You may have heard of Direct Consumer Credit. But, despite the name, it’s not always clear what this type of credit is about, is it? Still, Direct Consumer Credit is extremely popular, being used by a large part of the population, even though many do not even understand how this category of loan works.

Therefore, in this article, you will learn more about what Direct Consumer Credit is, how it works and what are the advantages and disadvantages of this type of financing. So, knowing this type of credit better, you will always be prepared to analyze which is the best option for your moment and what really fits within your finances.


Direct Consumer Credit: what is it?

Direct Consumer Credit: what is it?

In a simple way, Direct Consumer Credit is a financing aimed at all consumers; That is, anyone who wants to make purchases and purchases of products, services or durable goods in installments.

The Direct Consumer Credit can be offered by banks and credit providers, or even by stores that allow purchases by credit. Yes, the famous credit card that is widely used by Brazilians, mainly in department stores, is a variation of Direct Consumer Credit.

So, basically, Direct Consumer Credit is a loan with the objective of enabling the consumer to make his purchases, even if he is unable to pay in cash (at the time of purchase).

Most banks still offer another option of Direct Consumer Credit to account holders with a good relationship with the institution. In this case, the credit works like a “common” pre-approved personal loan, which can be used for any purpose and not only in installment purchases.


How does Direct Consumer Credit work?

Direct Consumer Credit work?

To understand how Direct Consumer Credit works, in practice, just know that every time you buy a product in installments, you are using the Direct Consumer Credit . If the purchase was made using a credit card, the bank is granting this financing. If the purchase was made through a credit card in the store, it is the store itself that is releasing the financing.

In the case of the Direct Consumer Credit offered by the banks, it is always linked to the service packages of the current accounts, and can be used without bureaucracy and with the total amount of the loan and can be paid in monthly installments automatically debited from the account.

To use this modality, however, the account holder undergoes an assessment by the bank, which includes factors such as the customer’s relationship with the institution and even possible restrictions on the CPF. As a result, Direct Consumer Credit is not always released for use, many times, not even appearing as an option for account holders.


How is the interest rate on Direct Consumer Credit?

Consumer Credit?

Like any type of credit, the Direct Consumer Credit presents fees charged by banks, stores and finance companies on the amount of the purchase or loan. But, what is the interest rate on Direct Consumer Credit?

When a purchase is made in installments, that is, using the CDC , the installments suffer an increase in interest. A practical example can be seen when buying a cell phone, which, in cash, would cost $ 1,000.00 and in installments it costs 12 times $ 110.00. That is, whoever chooses to buy the same device paying in installments, will disburse a total of $ 1,320.00.

This difference between the cash value and the installments (also called the term payment) is the interest rate of Direct Consumer Credit.

The amount of these fees may vary depending on the store or financial institution offering the CDC , but they are all specified on the Cream Bank’s website and can be consulted by anyone. It is worth noting that the interest rates for Direct Consumer Credit are lower than for other types of credit, such as overdraft, for example.

Advantages and disadvantages of CDC

First of all, we can say that the main advantage of CDC is the facility to contract it, since Direct Consumer Credit is a financing designed to make life easier for consumers, making it possible to buy even without cash for payment in cash. With this, the customer does not have to wait to make the purchase he wants.



In addition to being a kind of “easy money”, Direct Consumer Credit also has the following advantages:

  • facility to find and contract credit;
  • flexibility in payment terms;
  • lower interest than overdraft and credit card;
  • different types of credit aimed at specific interests, such as health and education;
  • possibility of anticipating installments and / or paying off the debt

Still, it is important to know that, like any other line of credit, CDC also has its disadvantages. In this case, one of the main ones is the payment of the IOF, the Tax on Financial Operations, which is still an extra amount that ends up leaving the portion higher than it could be.



In addition, we highlight the disadvantages of Direct Consumer Credit:

  • the more parceled the purchase, the higher the final value, which can reach twice the initial price;
  • financial evaluation, in the case of a pre-approved loan by the bank;
  • interest rate higher than savings income;
  • ease of accumulating debt

It is quite common that the accumulation of installments of different purchases ends up causing problems with debts and even joining the list of defaulters, which, by the way, only grows in Brazil.

Therefore, before hiring any type of Direct Consumer Credit (and any other credit), it is important to do financial planning, remembering that the general recommendation of experts is that debts do not exceed 30% of your monthly income.

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