The new ruling of the Supreme Court, on the price of revolving cards (ST 367/2022, of May 4), reviewed the case of a Barclaycard credit card contracted before 2010, specifically in 2006.
The Supreme Court has estimated that, in this case, an APR of 24.5% per year cannot be considered usurious since, on dates close to the issue of the card, "it was common for revolving cards contracted with large banking entities to exceed 23 %, 24%, 25% and up to 26% per year”, percentages that, the Court adds, are reproduced today.
With this new sentence, the High Court declared the importance of assessing the most reasonable prices used by the main banking entities that operate in the revolving card market when determining what is the "normal price of money" for this product and whether a TAE can be considered a user or not.
The sentence comes to clarify, both for consumers and for the financial sector, the existing confusion as to what prices apply in the rotating product, putting an end to the diversity of interpretations, sometimes contradictory around this issue, which has given This has given rise to great litigation that, without a doubt, should be reduced after having consolidated its interpretation on when these financial products should be considered or our users.
Judgment 367/2022, of May 4
Specifically, the new ruling of the Supreme Court clarifies the following 2 points:
The reference to decide if the interest of a credit card is usurious or not
The Supreme Court insists on clarifying, as it did in the 2020 ruling, that “to determine the reference that has been used as “normal money interest” to decide if the interest on the revolving card is usurious, the rate must be used. average interest corresponding to the specific category corresponding to the questioned credit operation, that of credit cards and revolving, not the more generic consumer credit”. The ruling expressly provided that, even for contracts prior to 2010, in no case should the general consumer credit be used as a reference, but rather the more specific credit and revolving cards.
How to determine the average interest rate corresponding to the specific category of credit and revolving credit cards: the APR applied to the different banking entities on the dates close to the subscription
The new ruling of the Supreme Court specifies how it will determine the specific reference or the average rate: the APR applied by the different banking entities, especially "the large banking entities" for that product on the dates close to the signing of the contract published by the Bank from Spain.
“The data obtained from the Bank of Spain database reveal that, on the dates close to the signing of the revolving card contract, the APR applied by the banking entities to credit card operations with deferred payment was frequently higher than the 20% and that it was also common for revolving cards contracted with large banking entities to exceed 23%, 24%, 25% and even 26% per year.
