Revolving cards and the abusive interests that many clients of some financial companies have suffered are the order of the day in the current legal situation and it is one of the most consulted issues in our law firm. In this guide I explain what they consist of and clear up any doubts about how to claim interest on revolving credit cards.
What is a revolving credit card?
They are known as abusive cards. This type of card allows you to obtain cash from a cash machine and make purchases by postponing and dividing payments into instalments, applying interest that may vary depending on the financial institution with which the agreement exists.
How do I know if the interest on my revolving card is abusive?
Interest that exceeds 20% of the amount borrowed is considered abusive interest. Therefore, if the information and conditions of your card show deferral interest higher than this percentage, your interest is excessive and you have the right to initiate proceedings to claim it.
The risks of revolving cards
Getting a revolving card may seem like a good idea because of the many advantages it offers, including getting money fast and paying it off slowly. However, you will see that they are not exactly what they seem and you may not be aware of all the disadvantages:
Incentivise consumption
The possibility of getting money upfront and immediately is very tempting. Many revolving card customers fall into the trap of compulsive consumption and, in some cases, very high amounts of money.
Very high interest rates
Getting 1000 euros quickly at 25% APR (Annual Percentage Rate) means that you will have to pay back 1250 euros within the agreed period. As I have shown you, anything above 20% APR is already considered abusive.
These percentages applied to large amounts of money can be a real problem. We are talking about, for example, if we make a compulsive purchase of a product or service of 5000 euros, we would have to pay back, only in interest, the amount of 1250 euros.
They are often marketed in a non-transparent way
Precisely because of the high interest rates, finance companies make a lot of profits from this type of card. As you can see, they have a hidden side, so it is common to find salespeople who exaggerate their possibilities and benefits and yet hide this important information.
How to proceed with a revolving card claim
If you have been wrongly charged interest on your revolving card, you can file a complaint in two different ways:
Out-of-court complaint directly with the credit institution
If the interest charged by the financial institution is abusive, the best way to complain is to contact them directly.
This is usually the quickest way and the one I recommend you start with. They are usually open to negotiation, as they are aware of the law and the costs that may arise from going to court.
Claiming through the courts
This route is used when no agreement has been reached with the credit institution. It involves filing a claim before a Court of First Instance and waiting for the trial to be held.
Glossary of frequently asked questions related to revolving cards
What is the deadline for claiming interest on a revolving card?
The deadline for claiming the abusive interest on a revolving card is 5 years according to the Civil Code. Although the period to claim the nullity of the contract does not expire, after these 5 years nothing can be done to recover the interest.
What documentation do I need to claim the interest on my revolving card?
To start the claim procedure, you must present the contract for the acquisition of the card with the entity and the amortisation tables of the revolving card (the movements that have been made during its use).
Is there any way to negotiate the interest on a revolving card?
Yes, it is possible to negotiate the interest on an abusive card, as financial institutions do not want to go to court and it is more profitable for them to reach an amicable agreement.
What happens if I am unable to claim the interest on my revolving card?
If the financial institution rejects the claim, you will have to go to court and file a lawsuit before a Court of First Instance.
How does claiming interest on a revolving card affect my credit history?
If the claim is favourable to you, your credit history will not be altered by this circumstance.
Are there organisations or institutions that can help me claim interest on my revolving card?
Yes, although anyone can make a claim, there are organisations such as the Organisation of Consumers and Users (OCU) that can act as a mediator for the claim.
There are also groups defending people who are victims of this type of debt that have the function of advising and accompanying them in the claim process.
Of course, the services of a professional lawyer who is an expert in this type of procedure can resolve the whole process in a simple and very convenient way for the victim of the abuse.
What is the deadline for claiming revolving credit cards?
Claiming the nullity of a revolving card is not time-barred, but the deadline for the return of the abusive interest does (5 years).
Most relevant rulings on revolving cards : Supreme Court of 4 March 2020
On 4 March 2020, the Supreme Court ruled that the interest on revolving cards is considered usury because it is significantly higher than that of a credit card (approximately 20%) and that the Bank of Spain publishes.
From what interest rate can I claim for a revolving card?
From an interest rate higher than 20% it could already be considered abusive, so you can start the complaint process.
Can I claim for a revolving card with an interest rate of less than 20%?
Yes, you can start a claim for abusive interest, even if it is less than 20%.
Can I claim interest on a revolving card without having statements or a contract?
Yes, you can get the documentation, even if you do not have the original contract or statements.
How much of the revolving credit will I get back?
If the revolving card contract is considered null and void by a court ruling, the credit institution will refund the amount you have paid in excess of the principal.
You will be able to recover 100% of the amount you have paid in interest but you will have to pay back the amount that the credit institution lent you.
Can I file a claim for cancelled revolving cards?
Yes, regardless of whether the debt and the card have already been cancelled, you can initiate a legal claim.
Conclusions
If you have been charged abusive interest for using a revolving card and you want to recover your money, do not hesitate to contact me. I will study your case personally, I will advise you on the necessary steps to take and I will handle the whole claim process. Our job is to make your life much easier and get the most favourable resolution for you.
