Revolving credit, where to subscribe? Bank or lender?

If you are used to this site, you have had the opportunity to read our warnings concerning revolving credits many times. Not that we consider them to be rejected, but rather to be used sparingly and above all with full knowledge of the facts.

In summary, our goal is not to discredit this type of financing as a whole but to ensure that consumers who use it do so knowing exactly what they are signing.

A few decades ago, the banks shunned what was called revolving credit at the time. On the other hand, the credit companies have rushed into the breach to such an extent that now it represents the largest part of their profits.

As a result, banks are increasingly starting to offer their customers revolving loans, which they also sometimes call revolving loans or even credit reserves. No matter the name, it’s the same thing.

Differences between revolving loans from banks and those from credit companies

Differences between revolving loans from banks and those from credit companies

1) From a legal point of view

1) From a legal point of view

No difference, and for a simple reason is that French law strictly regulates this practice. Ceiling, repayment period, everything is written in the consumer code. A financial institution which fails to comply with one of these legal provisions would be subject to very heavy fines. Not to mention the negative publicity it would generate.

2) From the loan contract point of view.

2) From the loan contract point of view.

With credit companies : The clauses are roughly similar or will vary very little between two contracts.

  • Companies specializing in credit to individuals are present on the net, just type “credit” on your search engine to convince yourself. It is possible on their sites to take out credit online.
  • They are also active in mass distribution and large specialized stores (DIY, sports, etc.). It is in these stores that we are sometimes led to take out revolving credit without the seller pronouncing this term once! This happens during a request for payment in three installments at no cost. The seller makes you sign many documents, without telling you that it is a reconstitutable credit! Certainly your financing in x times without fees is real, but suddenly you end up with a reserve of renewable money without your knowledge. And know that if you use it it will not be free of charge this time! Especially since annual fees are taken each year from the subscriber’s bank account.

With banks : It is often the bank advisor who offers this possibility to his customers.

You will not have an additional card in your wallet because generally the use of revolving credit is possible with the bank card (Visa or Mastercard). Credit is a kind of option on the card. ( Credit settlement or cash payment )

  • We will not name any names, but it still seems that there are cases of customers who discovered long after the signing, that they were holders of a revolving credit. These facts are however exceptions.

3) From the cost of credit point of view

3) From the cost of credit point of view

It’s no secret: Revolving credits come with very high rates. However, it would seem that those of the banks are more “reasonable”.

4) From the advice point of view

4) From the advice point of view

  • In case of a problem, it is undoubtedly easier to contact your bank advisor than a credit company advisor on a telephone platform.
  • In addition, the banks provide their branch advisers with serious training.
  • You should also know that if you are not satisfied with the services of a credit company, your room for maneuver is limited and unless you know the legislation well you could take months to obtain satisfaction.
  • While with your bank, revolving credit is only one of the contracts you have with them, therefore if you change banks, the latter will lose more than a credit contract. (Because you probably also have a car loan, a mortgage, a Livret A booklet, or other investments, even your car and property risk insurance or borrower insurance etc…). As a client, you therefore have a good card to play in the event of a dispute with the bank!

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