Revolving loan without pay or unpaid, what you risk

What are they rotating cards? In short, they are special credit cards allowing you to pay in multiple installments performed within a specific line of credit. In addition, very high interest rates are applied to payments. In addition, if you exceed the limit established by the bank, you will have to pay an additional commission (and salt). These are the main differences with a conventional credit card that allows, in fact, a simple extension of the payment. An interest rate is not always applied to the deferment of payment and, in any event, where it is applied, it is not particularly high.

Renewable loan: a small loan

In short, the rotating cards it is a means by which banks offer real financing to their clients without, however, requiring the same guarantees as those necessary for the granting of a normal loan. Thus, it is easy to understand why the tool has more and more success. In fact, this allows people who often have difficult access to credit (young and unemployed, for example) to have substantial cash. However, this availability often pushes us to exceed spending limits.

Revolving loan: the spiral of debt

Therefore, It's easy to get into a debt spiral by using a revolving card. A spiral that can get even worse if – given its "small" nature of funding – the available ceiling is used to pay the maturities of another loan or, worse, to settle a previously signed loan. This is an event that has recently been studied by the program "Di Tuesday".

The transmission of LA7 he told a story that seems to be a fairly common case. A person was found obliged to pay the monthly installments of a loan and to cope with the daily expenses for which she had opted for a revolving card, and then to end up in the same place. obligation to pay these very high payments. To avoid foreclosures, he renegotiated his debt by paying a fixed monthly amount for many years.

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