February 10, 2026
Impact of the absence of financial education on the management of Brazilian personal credit
Stefany dos Santos de Oliveira; Rogiene Batista dos Santos
Summary prepared by the ResumeAI tool, an artificial intelligence solution developed by the Pecege Institute focused on synthesis and writing.
Serasa data indicates that, in December 2024, the country registered 73.5 million indebted individuals, an alarming number that not only represents a statistic but signals a profound gap in the population’s ability to manage their financial resources sustainably. (2018), is a multifaceted learning model, focused on resource planning and management, that empowers individuals to make more conscious choices, prevent excessive indebtedness, and build a financially stable and secure future. Historically, the approach to financial education in Brazil has been limited and elitist, often directed at investment guidance for an audience that already possessed stability and surplus capital (Araujo and Calife, 2014).
(2024) argue that the early introduction of concepts such as saving, budgeting, and the value of money not only teaches mathematics but also internalizes responsible behaviors and values that solidify and guide financial decisions in adulthood. It involves the development of practical competencies and skills that familiarize students with the financial world, promoting a deep understanding of how the economy works, the importance of personal resource management, and the principles of conscious consumption (Silva and Powell, 2013). As highlighted by Lakatos and Eva (2021), the use of multiple secondary data sources provides a robust theoretical foundation and prevents the repetition of research efforts already consolidated. The exploratory approach, in turn, was fundamental to deepening the understanding of the topic and formulating the central questions of the field research (Lozada and Nunes, 2019).
The collection occurred between April 14 and 17, 2025. The waiver of submission to the Research Ethics Committee (CEP) was justified by the nature of the data collection, which ensured complete anonymity of the respondents, not collecting personally identifiable information such as name, email, or CPF, and ensuring voluntary participation. The questionnaire was methodically structured into five thematic dimensions, each designed to investigate a specific aspect of the problem. The first dimension, “socioeconomic profile”, collected essential demographic data such as age group and monthly family income, allowing for segmentation and correlation of results. The second, “lack of financial notions”, sought to assess the participants’ level of financial literacy, inquiring about prior contact with the subject and, crucially, about the understanding of the concept of compound interest, a key indicator of financial knowledge.
The third dimension, “financial habits”, investigated practical behaviors, such as the existence of expense control and the ability to form an emergency fund. The fourth, “credit usage”, mapped individuals’ relationship with credit tools, such as card ownership and loan applications. Finally, the fifth dimension, “indebtedness and default”, measured the history of negative credit reporting and experiences with credit denial, providing a direct overview of the respondents’ financial health. The survey results revealed a respondent profile predominantly concentrated in the age group of 28 to 43 years, which corresponded to 45.83% of the sample.
This phase of life is particularly critical for the application of financial concepts, as it is where decisions of great impact occur, such as career consolidation, family formation, acquisition of real estate and vehicles, which often involve contracting long-term credit and directly affect future financial health (Junqueira, 2025).
The analysis of default corroborated this vulnerability conclusively: 62.86% of respondents who have had their names negatively listed belong to this age group. This concentration is notably higher than that observed in national Serasa data (2025), which, although also pointing to the vulnerability of this range, positions it as the second most affected, generally after younger individuals. This may suggest that, in the studied sample, the financial pressures of middle adult life manifest even more intensely. Academic literature offers robust support for these findings, indicating that the perception and behavior regarding debt vary significantly with age.
Younger individuals, at the beginning of their financial lives, tend to be less concerned about future indebtedness, while those over 45 years old demonstrate a greater propensity to accumulate higher-value financial commitments, often related to long-term investments (Daud et al., 2023; Keese, 2010). In contrast, older adults generally show a lower propensity to incur new debts, adopting a more conservative stance (Ponchio, 2006). Additionally, the literature indicates that a low level of schooling is consistently associated with a higher probability of indebtedness, highlighting educational attainment as an important factor of financial protection and resilience (Greig et al., 2019).
The income analysis of the participants showed that the vast majority, 70.83%, have a family income of up to four minimum wages, with the highest concentration (37.50%) in the range between two and four wages. This data is crucial, as it reflects the greater exposure of low and low-medium income groups to financial instability and the risk of default (Campbell, 2006). Financial well-being is directly influenced by the delicate relationship between earned income and current expenses (Fraga et al., 2017), and consumption choices are ultimately determined by disposable income after essential spending (Blanchard, 2004). The research revealed a direct and concerning correlation: default is disproportionately concentrated in lower-income groups.
Of the participants who have already defaulted, 42.86% belong to the 2 to 4 minimum wage bracket and 34.29% to the 4 to 10 wage bracket, confirming that economic vulnerability translates directly into greater difficulty in honoring financial commitments. Data from the National Confederation of Commerce of Goods, Services and Tourism (CNC, 2025) corroborate this trend on a national scale, confirming an increase in indebtedness in all income brackets in the period between April 2024 and April 2025. The strong correlation with the findings of this research suggests that, although indebtedness is a widespread phenomenon affecting society as a whole, its most severe consequence, default, is more pronounced and persistent in lower purchasing power groups.
For this segment of the population, the margin for unforeseen events is minimal, and factors such as impulsive consumption (Santos et al., 2023) or the loss of a source of income due to unemployment (Souza, 2017) act as triggers that quickly worsen the financial situation, transforming manageable debts into a state of over-indebtedness. One of the most worrying findings of the study was the profound gap in knowledge about compound interest: 58.3% of participants openly stated they did not understand or had great difficulty applying the concept in practical situations. This lack of understanding is alarming, as compound interest is the main financial mechanism that exponentially accelerates the growth of debt, turning small debts into unpayable amounts in a short period of time (Serasa, 2024).
Individuals with low financial literacy frequently use this powerful mechanism unfavorably, becoming victims of interest on credit card revolving credit or overdrafts, instead of leveraging it to their advantage in long-term investments (Oliveira, 2022). This knowledge asymmetry greatly hinders exiting the default cycle and building wealth. The use of credit cards proved central to the respondents’ financial routine: 88.89% own at least one card and almost 80% stated they use it “always” or “frequently”. This data is perfectly aligned with national reports indicating credit cards as the main type of debt for Brazilian families (Perfil e Comportamento do Endividamento Brasileiro, 2022; CNC, 2025). Consumer culture, strongly driven by the apparent ease of “interest-free” installment payments, often leads to the acquisition of unnecessary products and services or those that exceed payment capacity (Copetti, 2018).
In this scenario, the card ceases to be a means of payment and functions as a dangerous extension of income, generating debts with charges and interest rates among the highest in the market (Aquino, 2025). The ease of obtaining cards contrasts drastically with the high interest rates of revolving credit, exposing unprepared consumers to high risks of over-indebtedness (Donadio et al., 2012). The search for other forms of credit was also a practice observed in the sample, with 37.5% of participants having applied for loans or financing in the last 12 months. Although access to credit is an important component for individual and collective financial development (Levine et al., 2000), a significant portion of the sample faces barriers to obtaining it: 43.1% of respondents have already had a credit application denied.
This data highlights the complexity of responsible credit granting, which must seek a delicate balance between ensuring access to resources for those in need and preventing excessive indebtedness for those who cannot afford new debts (Marchi and Barreto, 2022). Credit denial, although frustrating for the consumer, can function as a protection mechanism against even greater indebtedness. Regarding formal financial education, 56.9% of participants stated they had some contact with the subject in school or college. This number is surprisingly higher than the national average of 35% indicated by the “S&P Global Financial Literacy Survey” (Klapper et al., 2014), which may reflect the sample’s profile. However, in-depth investigation revealed that this contact is often superficial and, more importantly, does not translate into consistent and healthy financial practices.
Although 88.9% of respondents sought information about finance on their own, demonstrating interest in the subject, 62.5% did so sporadically, without a learning routine. This is directly reflected in daily habits: only 52.8% always record their expenses and only 26.4% manage to save some amount monthly, while another 26.4% admit to saving absolutely nothing. The data reinforce the thesis that the lack of financial control is a primary cause of default (Carmo, 2012) and underscore the need for education that goes beyond theory, focusing on practical application and behavioral change (Alves and Carvalho, 2020).
The integrated data analysis allowed for the identification of a strong and clear correlation between the lack of financial education and the propensity to incur debt. The difficulty in understanding fundamental concepts such as compound interest, combined with consumption habits driven by the ease of credit and social pressure, creates a scenario of high vulnerability. This vulnerability is particularly pronounced for the lower-income population and for the age group between 28 and 43 years old, who are at the epicenter of adult life’s financial pressures. Sporadic learning and occasional information seeking proved insufficient to promote lasting behavioral changes, such as systematic expense control and the formation of an emergency savings fund. The use of credit as a supplement to income, rather than as a strategic tool for planned investments, perpetuates the debt cycle and hinders social mobility.
It is concluded that the lack of financial knowledge decisively affects the management of personal resources, favoring hasty decisions, the improper use of credit tools, and consequently, the growth of indebtedness in the Brazilian adult population. This effect is accentuated and more damaging among lower-income groups, who have less room for errors and unforeseen events. The findings of this research reinforce the urgent need for public policies and governmental actions that promote continuous, accessible, and quality financial education, from basic schooling to adult life, with a special focus on the practical application of knowledge in daily life. At the same time, the irreplaceable importance of individual effort in developing discipline, planning, and financial control as mechanisms for preventing over-indebtedness and as a path to improving quality of life and achieving stability is highlighted.
It is concluded that the objective was achieved: it was demonstrated that the lack of financial knowledge interferes negatively in how people deal with credit, contributing to financial disarray, indebtedness, and default in the Brazilian adult population.
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Executive summary from the Final Project of the Specialization in Finance and Controllership of the MBA USP/Esalq
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