The Azcárate law, also known as the usury law, is a norm that has been in force for more than 100 years in Spanish Law.
The Azcárate Law is a law that serves to declare loan contracts void when they can be considered users.
Despite its age, it has recently been the subject of frequent controversies, especially in relation to revolving cards.
Some more details of the Azcárate Law or usury.
One of the articles of this Law (Art. 3) determines that only the borrowed capital will have to be returned without taking into account interest when said loan has been cancelled.
This can give different assumptions:
- That the amount claimed has already been paid.
- That the amount claimed has not yet been paid.
- In the event that a higher amount has been paid, the lender will have to return the corresponding difference.
- If less interest has been paid than what has been decreed by law, you will only have to pay up to that amount, never exceeding it or reaching the original amount.
Revolving Cards and the Azcárate Law.
Revolving cards have become a popular model for obtaining financing in recent years. In most cases, users chose them to make purchases with ease. However, currently, these cards have their days numbered due to the application of this usury law.
This is mainly due to the fact that revolving cards have user interest. These user interests are those that are notably higher than the normal interest on money. The usury law comes to protect the inexperienced user or the person who is in a needy and desperate situation and who accepts the loan money.
Likewise, another problem that occurs with revolving cards is that more money was returned than had been borrowed. In this way, new interests were generated, entering an endless wheel. Practically the only thing that was done was generate and pay a lot of interest.
If you need specialized advice on this matter, do not hesitate to contact us.
You can access here to other articles related to revolving cards and Usury Law.
