At Tecem Abogados y Asesoresa leading law firm in Malaga specialized in banking law and consumer protection, we have detected a significant increase in the number of queries related to revolving cards and the contracts that accompany them. Many of these situations hide abusive clauses that seriously compromise the user’s economy. Therefore, we want to help you identify when a contract of this type can be considered void for lack of transparency, and what steps you should follow to claim your rights.
Revolving credit cards have come under increasing scrutiny in recent years due to the conditions they impose on consumers. These cards allow payments to be deferred through monthly installments, but their structure can lead to situations of prolonged indebtedness if they are not properly managed. The lack of transparency in the information provided by financial institutions at the time of contracting has been a key factor for the courts to consider these contracts abusive.
What is a revolving card?
A revolving card is a type of credit card that offers a revolving line of credit. The holder can make purchases or cash withdrawals up to a set limit and repay the money in monthly installments. The special feature of these cards is that, as payments are made, the credit is restored, allowing for new withdrawals. However, the interest charged is usually high, and if the monthly installments are low, a large part of the payment goes to cover interest, leaving the principal almost untouched. This can generate a spiral of debt that is difficult to pay off.
Lack of transparency in revolving contracts
Transparency is essential in any financial contract. In the case of revolving cards, the lack of clarity in the information provided to the consumer can lead to the consumer not fully understanding the implications of the credit they are contracting. The main deficiencies in the transparency of these contracts include.
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Debt calculation: It is not clearly explained how the debt is calculated, which prevents consumers from understanding how their financial obligation will evolve over time.
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Actual cost of the long-term loan: Entities do not adequately report the total cost of the loan if it is held on a long-term basis, including the total amount of interest to be paid.
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Impact of the minimum installment: There is no detail on how the payment of a minimum installment affects the balance owed, which may lead the consumer to think that he is reducing his debt when, in fact, he is barely covering the interest generated.
Supreme Court Jurisprudence
The Spanish Supreme Court has addressed the problem of revolving cards on several occasions, establishing criteria to determine when a contract of this type can be considered abusive due to lack of transparency. In recent rulings, the high court has emphasized that.
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The information provided to the consumer must be sufficient for him to understand not only the conditions of the contract, but also the economic and legal consequences that it entails.
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The lack of transparency in the clause that establishes the Annual Percentage Rate (APR) may cause a significant imbalance to the detriment of the consumer, being considered abusive.
These court decisions reinforce the idea that it is not enough for the consumer to understand the words of the contract; it is essential that he understands the practical consequences of the agreed terms.
Relevant cases
A prominent example is the case against Carrefour, where the Supreme Court ruled in favour of a consumer who complained about the lack of transparency in the clauses of his Visa Pass revolving card. The court determined that the entity had not complied with the transparency controls, which led to the declaration of nullity of the abusive clauses and the return of the interest paid in excess by the consumer.
Recommendations for consumers
If you are a revolving card holder and suspect that there may have been a lack of transparency in your contracting, it is advisable.
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Review the contract: Carefully analyze the terms of the contract, paying special attention to the APR and the amortization system.
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Request additional information: If there are aspects you do not understand, ask the financial institution for clear and detailed explanations.
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Consult a specialized lawyer: A legal professional will be able to advise you on the possibility of claiming the nullity of abusive clauses and the recovery of unduly paid amounts.
At Tecem Abogados y Asesores we have a team of lawyers specialized in banking law and consumer protection, with extensive experience in the claim of abusive interests of revolving cards. If you think you signed a contract without really understanding its conditions, or if you are trapped in a debt that never decreases, we help you to analyze your case and claim what you are entitled to. We are located in Malaga, but we offer advice nationwide.
Contact us today. Claiming your rights is easier than you think!