This credit is simply at your disposal a reserve of money that you spend freely at your own pace, asking for a check or a wire transfer from your bank account, or by purchasing a card with specific backed credit.
Your reserve decreases each time you rebuild and as you pay off your credit.
Advantage and disadvantage
This type of loan is very versatile as you use it according to your needs, varying amounts within the limit of the maximum amount (or overdraft).
But beware: the cost is generally high. Interest rates are indeed higher than those of traditional consumer credit. In addition, the interest rate is variable each year.
Rules to respect
The revolving credit facility must meet not only the general rules of consumer credit, especially with respect to the submission of the initial offer, the withdrawal period, insurance companies, but also some specific rules to better inform and protect the consumer.
The preliminary offer
The initial offer must be established and be given to you during the initial subscription, but also each time you request an increase in your credit.
It shall specify the date, the name and address of the lender, your name and address, the credit repayment (levy on bank or postal remittance or check), the amount of credit allowed, repayment terms.
Credit cards are available
– Or store cards only accepted in certain signs and generally act as loyalty card.
– Cards are comparable to a conventional bank card backed by a bank or interbank network.
In all cases, the word “credit card” must be specified in legible characters on the front of the card.
Information during the contract
The lender must send each month before payment deadlines, a document which contains the fraction of capital still usable, the amount due in distinguishing interest, the total amount payable, the amount of the repayments already made highlighting the paid part in respect of capital and the paid part in respect of the interest and other charges.
At any time, you can ask:
– The reduction of your credit reserve,
– The suspension of your right to use your reserve
– The termination of your contract which means to repay the amount of the reserve already used to conditions of the contract.
Tips and Precautions
If you buy a product or a well in a store and the seller offers revolving debt to pay, be aware that:
- You can within 7 days cancel your revolving debt
- But your contract of sale, it will not be automatically canceled and you cannot cancel your purchase.
If you need funding for a specific purchase, ask the seller to offer a consumer credit related to your purchase (appropriation), it will be cheaper and if you give your credit within the legal period of 7 days, your contract will be automatically terminated.