What a revolving credit card is and why the debt never goes down
It is a card or credit line where you pay a fixed monthly instalment and the debt keeps renewing itself. Most of what you pay goes on interest and charges, and the amount you owe barely falls. Every time you use the card, the new spending is added to the debt and financed again.
These cards are often granted quickly, sometimes without checking whether you can afford them, and they are sold under very different names: a store card, a deferred-payment credit, a card for buying in instalments. Many people do not understand how they work until, years later, they realise they have paid far more than they borrowed and still owe money.
Two ways to claim
Usury
The Ley de Represión de la Usura of 1908 (the Spanish Usury Act) allows loans to be declared void when the interest is notably higher than the normal cost of money and out of proportion to the circumstances of the case. The Tribunal Supremo (Spain’s Supreme Court) has applied this law to revolving credit cards and set out how the comparison is made: the APR in your agreement (TAE) is compared with the average rate for credit and revolving cards published by the Banco de España (the Bank of Spain) for the date you signed. If the difference is notable under the Supreme Court’s criteria, the agreement is usurious.
Lack of transparency
Even if the interest is not usurious, the agreement can be declared void if it did not clearly explain how the card worked and how much it would cost you. This is known as the transparency test (control de transparencia): it is not enough for the interest rate to appear in the agreement, you must have been able to understand its financial consequences. The layout of the agreement, the print size, where the interest rate appears and the information you were given before signing all matter here.
What you get if the agreement is usurious
The Usury Act provides that, once the agreement is declared void, you only have to repay the amount you actually borrowed. Everything you paid on top, in interest, charges and linked insurance, is deducted from the debt. If you have already paid more than that, the lender must refund the difference. I explain this in more detail in the article on usury law and abusive interest rates.
If the agreement is void for lack of transparency, the effect may be different and depends on which clauses are struck out. That is why I look at both routes before deciding which one to pursue.
Before you claim, it helps to know
- You do not need to have the agreement: the lender is obliged to give you a copy and your statements.
- The fact that a debt collection agency or a fund has bought the debt does not stop you from claiming.
- If you have been added to a debtor register (fichero de morosos) over this debt, action can also be taken. I explain this under solvency files.
- Before suing, you must try to negotiate with the lender, as generally required by Ley Orgánica 1/2025 (the 2025 law on the efficiency of the justice system).
If your problem is with another banking product, you will find more information under bank claims.
