Since Saturday, January 2, 2021 the different phases of the recent ministerial order concerning the Crédito revolving, with the so-called January slope as a backdrop, this time it could be further entangled by the crisis arising from the pandemic.
This new regulation focuses on increasing transparency with customers and thus being able to prevent future situations of unsustainable indebtedness by strengthening the solvency assessment that entities must perform before granting a revolving credit.
The main changes that are established with the order for the entities to commit that customers have sufficient payment capacity to cover the annual amount of the installments that amortize, at least, 25% of the limit of the credit granted.
Also the incorporation of additional obligations on information, both at the time prior to contracting and throughout the life of the contract, so that the customer is at all times aware of the debt and the options available to lighten it.
The order was published on July 24, 2020 and, although they will begin to incorporate some provisions this January 2, others will be adopted on a transitional basis and will not enter into force until the end of January and others even until July 2022.
During the last few months, the Bank of Spain, aware of the risks, has adopted a very active stance in terms of warnings about revolving services and, through the Banking Customer Portal, has sought to provide extensive information on this financial product.
It so happens that the vast majority of the most active entities in this market are not complying with the card transparency regulations. Only last summer, the Bank of Spain sent letters with several requirements and recommendations to 24 entities in relation to the commercialization and contracting of revolving cards and deepened its study on two other firms.
The coronavirus pandemic, and the Christmas holidays, caused an exponential increase in the commercialization of this type of credit due to the deterioration of the economic situation and the usual increase in spending during this period.
While this route may be helpful in the short term, it ends up plunging those who choose it into a spiral of debt from which it is not easy to escape.
In addition to being usually accompanied by a complete lack of transparency in their marketing, revolving cards have as their main feature the abusive interest rates that are usually higher than 24% APR.
Different specialists point out that revolving card debts practically do not decrease, even if payments are made monthly.
With reference information from the following digital media: