Post a Comment Print Share on Facebook
Featured Colombia IBEX 35 Japón María Jesús Montero Dénia

The volume of 'revolving' credits shoots up 17.6% in July

The average interest rate falls slightly to 18.

- 5 reads.

The volume of 'revolving' credits shoots up 17.6% in July

The average interest rate falls slightly to 18.22%


The outstanding balance of credits with deferred payment and 'revolving' cards stood at 11,374 million euros in July, which represents an increase of 17.6% compared to a year earlier, as well as a slight decrease (-0, 4%) compared to the month of June.

This is reflected in the latest data from the Bank of Spain, consulted by Europa Press, which show that the outstanding balance of this type of operation has grown by 13% since the beginning of 2022, although it is 0.18% below February 2020, the last month before the outbreak of the coronavirus pandemic.

The increase in 'revolving' credit operations throughout the year coincides with record figures in family savings. At the end of July, the deposits of Spanish households amounted to 997,400 million euros, a figure that exceeds the savings of a year before by 5.78%.

Likewise, it occurs in a scenario of triggered inflation. Precisely, the experts at Reclama Por Mí attribute the increase in requests for revolving cards to the rise in inflation, which raises the cost of living for Spanish households.

Specifically, the Consumer Price Index (CPI) has shot up its interannual rate in July to 10.8%, its highest level since September 1984 and six tenths above that registered in June.

"This circumstance has drastically reduced the purchasing power of families who, in this situation, are forced to resort to alternative financing systems that hide high interest rates, such as revolving cards," they point out from the platform specialized in defense of the consumer.

The 'revolving' cards provide the customer with a credit limit that can be repaid in installments through periodic installments that can be established as a percentage of the existing debt or as a fixed installment.

The debt derived from the credit is renewed monthly, reducing with installment payments and increasing with the use of the card and with the interest, commissions and expenses generated, which means that, if the monthly installment paid is very low compared to to the amount of the debt, the amortization of the principal is carried out over a very long term, raising the interest to be paid.

The Supreme Court determined on March 4, 2020 that revolving card contracts with interest rates higher than the normal interest of money should be considered usurious, which has caused a barrage of consumer lawsuits for this concept.

Data from the Bank of Spain show that the average rate for 'revolving' credit cards stood at 18.22% in July, slightly below the 18.55% registered a year ago, but well above the average rate weighted 6.82% applicable to the rest of the consumer loans. Before the Supreme Court ruling, the average rate for new operations with revolving cards was around 20%.

Your Name
Post a Comment
Characters Left:
Your comment has been forwarded to the administrator for approval.×
Warning! Will constitute a criminal offense, illegal, threatening, offensive, insulting and swearing, derogatory, defamatory, vulgar, pornographic, indecent, personality rights, damaging or similar nature in the nature of all kinds of financial content, legal, criminal and administrative responsibility for the content of the sender member / members are belong.