Revolving credit cards are great for making purchases if you don't have enough money to do so, but this is a double-edged sword and may turn out to be far less attractive than it looks. What is commonly called revolving credit is directly responsible for 80% of over-indebtedness files . The law on over-indebtedness is not very well respected by supermarkets, e-shops and other stores, which offer their credit cards to whoever wants them, without further form of lawsuit.
Let's go back to the definition of revolving credit . This type of credit is a consumer credit and each time the user draws money from his reserve, it is replenished as and when repayments are made. To talk about the disadvantages, the first is the very high rate of this type of credit, because it oscillates around 20% , which is enormous . The amount for which the loan is requested is not a fixed amount , it is continuously variable .
The credit agreement is not made only for the intended purchase, as in most cases it is a reserve of money , and in the event that for one reason or another one does not use it, one is in any case obliged to repay each month.
Despite the Lagarde law which forces stores to offer their customers other products than revolving credit, the latter remains in place, while consumer credit which will make it possible to make a purchase in several installments, is left aside, and it's free.
Stores and supermarkets circumvent the law a little to manage to place revolving credits , because if the customer opts for a consumer credit, he is automatically given a loyalty card which has a reserve of money and he falls without even realize it, on a revolving credit.
Both sellers and websites don't care too much about customers' creditworthiness what matters to them is making sales and are lenient when it comes to information on their creditworthiness.