You should not hire a “revolving” card for all that

In 2014, he bought a dryer in Naron for 489 euros and incurred a debt of nearly 12,000 euros. It is one of many striking cases that have to do with revolving cards. In fact, with the consequence of their employment.

This client from Naro went to court, but the provincial court in A Coruña just sentenced him to pay almost half of the debt that Cofidis is claiming: 5,418.46 out of 12,000 euros.

What are “revolving” and what are the risks?

Revolving cards are the way fast financing with a quota chosen by the client, but with disproportionate interest.

Money in just a few hours

This type of financing allows the client to access the requested amount in hours, in order to dedicate it to consumption if possible. After approval, you can start managing the money. It is returned every month according to the amount spent and what was signed with the financier in question. You can also establish a fixed fee, “a pleasant 20 euros per month”, some advertisements say. The interests are, yes, disproportionate. If the money is paid back as a percentage, it will vary if capital provisions continue to be created. If a landline is paid for, which is the most dangerous modality, the charges will increase. Repayment is delayed, and the interest rate increases.

endless interests

As the money is amortized, the amount is available again. A part of the total debt is paid each month. The installment does not cover the used principal, so the next month’s installment is due and part of the previous one.

money always available

Once the money is approved, the debt is paid and the requested amount is reimbursed. AND the user can dispose of it again. This is where the eternal debt begins. For example, a person asks for 3,000 euros. If you buy 2,000, you have another 1,000 available. As we pay the amount we had, the loan increases again. If we returned 100 euros, we now have 1100 to use. The injured party can, for example, pay between 50 and 100 euros per month, but since there is still money, the number of installments increases instead of decreasing. If there are delays, they are repercussed very high commissions which, if not paid, continue to create debts. Example: the client asks for 1,000 euros. He pays a monthly fee of 30. His idea then is that he owes 970 euros. With a real interest rate of 29%, the realized interest amounts to more than 24 euros. In other words, he amortized only 6, although he pays in installments of 30. He still owes 994. And so from month to month. If this continues, instead of 1,000 euros, they will return almost 4,000.

Disinformation

Those affected usually do not adhere to contracts or have never had one. The statements do not reflect the APR, but other monthly indicators that hide the real cost of the operation. With these loans, the interest rate is between 22 and 28%. The Supreme Court set the criteria for considering abusive “revolving” last May. In many cases, the language of the documents is complicated or even too small.

simple contracts

Hiring is, yes, simple. All you need is an ID and proof of account ownership. It can be rented by phone. There is no user risk assessment.