In recent years, revolving cards have captured countless headlines due to the different court rulings that have come out against them. Now, after the multiple conflicts that have led some companies to court, having to suspend debts and even compensate users, interest rates have fallen below 18%. Something newsworthy considering that this is the first time they have fallen below this barrier, at least the first since the Bank of Spain published the statistics.
Since statistical data is available, these cards have always charged high interest rates, sometimes exceeding 21%. However, the judicial situation of this type of financial product has caused them to follow the opposite direction to the market movement and lower interest rates.
With the current situation, in which the European Central Bank has raised rates for the first time in eight years, placing the general rate above 2.5%, the trend is for interest rates to rise. Mortgages, personal loans and even deposits have risen. However, revolving cards seem to go the opposite way. But, this movement has little to do with the market, but rather with the judicial pronouncement.
And it is that, the courts have already agreed with several users who have claimed the collection of 'usurious' interest. That is why the issuers of these cards are looking for a way in which their interests do not enter the degree of 'usury' and thus avoid new judicial conflicts. To find out the degree of usury, the interests of these cards are compared with the market averages. Thus, at this time those who are above 18% will be at risk of being considered 'loan sharks'.
Taking into account that the consumer loans granted by banks charge interest of 7.28%, the highest level since September 2019, the 18% charged by revolving cards is still high, but in that section it is not considered ' usurer'. Even so, they are credits 2.4 times more expensive than those granted by entities for consumption.
Despite the cost of interest, revolving credit does not stop growing. And it is that, in terms of the month of October of this year, the grants in this modality were estimated at 11,300 million. This is a growth of 15% compared to October 2021. For its part, in consumer loans, 2,573 million were granted in the month of October.
Although it is true, at that time, the specific card was from 2008 with average rates in the market of 9.071% (TAE). Despite this, the Provincial Court of Madrid considered that 18% was still too high and ended up agreeing with the client, who received all the amounts paid that exceeded the loaned capital plus the appropriate legal interest.
Thus, the courts seem to be forcing revolving companies to moderate their interests in the face of the wave of legal rulings contrary to their terms and conditions. Therefore, it is likely that interest rates will continue to moderate, although it will depend on what the market average continues to show, which suggests that it will remain high during 2023 due to the rate hikes approved by the European Central Bank.
In this sense, the courts invite you to look at the interest that you are paying for this type of loan, since if it is excessive, it can be claimed through the courts to denounce the 'usury' and receive the overpayment in interest.
