Inflation and the proximity of Christmas are creating that sand increase the number of zamoranos who choose the credit card to make ends meet or make purchases that occur on these dates, which can cause heavy debt for the population.
In this regard the Bank of Spain notes that “risks to financial stability have increased due to geopolitical tensions and persistently high inflation”. Furthermore, they argue that “the economic growth projections for 2023 have been revised downwards and the inflation projections have been revised upwards”.
According to data collected by the banking system supervisor, there is a significant increase in the number of operations done through the Credit cards. Likewise, the branches of the province, In the absence of closing results for the year, they keep it the bargaining and use of this means of payment could be increased by around 15%.
This is underlined, for their part, by the city businesses the payment method is polarizingbeing on the one hand customers who always pay in cash to control the spending they do, and those who have joined the payment by credit card and rarely have cash.
This trend worries economic experts, as it could lead to widespread indebtedness among citizens, as happened on numerous occasions during the 2008 crisis, in which the household economy was involved in a dangerous cycle of debt, credit to take it on and, again, debt. In this sense, the BdE underlines that the current situation “has a negative impact on the ability to pay of households and businesses, especially the most vulnerable sectors, with low incomes and a high level of debt”.
Then, another factor that gains weight comes into play, applying for quick loans with significant interest, difficult to take on for a large part of the population, which leads on numerous occasions to the request for a new loan to meet the previous one. In this way the sum between the amount owed to the bank for the use of the card and the accumulation of creditsit can cause the “perfect storm” and the first few months of the year can be a real economic hardship for everyone involved and for the economy as a whole, in a context where the word “recession” rings in the background.
The loan offer increases due to the financial situation
The pandemic has been an economic blow to many homes in Zamora. Business closures, loss of sales volume, unemployment and other problems that have led the population to “eat” the savings to try to stay afloat. Three months after the third anniversary of the black march after which the pandemic was named, many families have not been able to recover, others have seen their situation worsen and many new ones have joined due to the increase in prices.
For these reasons, many families have seen the only way out apply for a credit or microcredit with which to pay the electricity bill or try to continue opening your own business. However, these “miracle fixes” end up being mere patches that undermine the situation and the pockets of the Zamoranos.
As usual whenever there is an economic downturn, the supply of loans skyrocketsthe number of entities promoting quick cheap amounts skyrockets, with interest taking over the fine print.
Even though the credits were also peppered with the revolving card controversy, it’s still common to see quite high interest rates, around 25%, and even higher in the case of microcredits. Currently it is possible to request an economic amount of these characteristics also at the ATMs of some bank branches, increasing customer access to this mechanism.
Alike, Other subjects make a certain economic sum available to users what can be spent and what will have to recover later, included in the available balance that of the customer, without noticenor any explanation of their conditions or interests.
The rotation continues to grow despite the lawsuits filed
spinning cards, a payment method with which it is possible to defer and split payments of purchases, a supposed headache for justice, due to the high interest charged by the banks. The sentence of the Court of Cassation of March 2020 caused the lowering of the type of interestbut the reality is that people are still talking and 20%a very high figure that ends up significantly increasing the payment that users have to face.
Practically, the function of these cards is that of a microcredit. Unlike a conventional credit card, which defer payment until the end of the month or the following month without interest, revolving cards split payments and are subject to interest. Although many customers are in a question situation against their banks and their lawyers advise them not to use them, many continue to do so, further increasing the spiral of “economic debacle” in which they find themselves immersed due to the cost of interest.
Experts recommend avoiding long-term payment
Experts are putting on the table a series of recommendations with which to make responsible use of cards and other means of payment available. These include the option of avoid the “minimum payment”moving the remainder to the following month, with the respective interest in some cases; disable the cash advance option with which the cashier gives the possibility to withdraw an economic sum that will not “leave” from the current account, but from a loan from the card itself; dodge long-term financing when it can be avoided; put a cap, a maximum spending amount that can be made monthly with the card; ask the bank for a document containing all the requirements and characteristics of the contracted card; Y make a cost forecast appropriate to what is actually payable.
