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The Covid crisis triggers interest in the revolving card despite the risk of hiring it

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History repeats itself. As happened in the recession of 2008 and 2012, the crisis caused by Covid-19 has made families spend months financing themselves to meet expenses, resorting to quick loans or revolving cards, despite the risk involved in hiring this type of products, classified as usury by the Supreme Court itself.

To be able to continue facing your monthly payments in a situation as complicated as the current one, marked by unemployment and economic uncertainty, many people have contracted or will contract a revolving card or a microloan in a few months. In fact, the number of consumers who were interested in revolving cards was increased by 42% during the state of alarm, according to the financial portal MiSolvencia.es.

These lines of credit are perceived as a short term flexible option, since they allow you to make any type of payment instantly even if cash is not available, deferring the payment at the end of the month. However, revolving cards can be a poison apple, since it is a type of financing that has high interest rates, which plunge the affected person into debts that can last decades. Moreover, this situation often forces many to take out a new loan to pay the previous one, thus immersing themselves in a infinite loop of debts.

"After the first few months using the revolving card or microloan, those who hire them soon realize that they are paying too much for the money they requested at first. The initial relief of facing the expenses soon becomes a spiral of debt that is complicated leave even if family financial stability recovers. And if the family cannot meet the payments, the situation worsens even more, "they explain from the law firm Reclama Por Me.

It is not uncommon for consumers to turn to financing to meet certain expenses. However, banks do not usually grant loans to those who do not meet certain financial requirements. This is where the problem arises, when traditional channels deny credit, people turn to alternative channels. This is how a real boom in the financing market was created in the crises of 2008 and 2012 through revolving cards or microcredits.

As the lawyers detail, these credits, which in the short term may seem like a solution, in the long run become a almost perpetual debt due to high interest rates and deferred payment. In general, they carry interest around 25% APR and high commissions. This is the situation that is being generated today. People have already turned to this funding, as demonstrated in the increased delinquency rates. Soon, even in these ways they will not be able to meet the expenses and the debts contracted with this type of cards will weigh down any attempt to get out of the situation even if it turns favorable. They must not only repay the debt, but also very high interests.

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