The rise in interest rates has made consumer credit more expensive by 34% in the last year, reaching an Annual Equivalent Rate (TAE) of 8%which rises to 18% for purchases in large stores, according to data from the Banking Products Negotiating Agency.
Thus, the price of consumer financing has fluctuated depending on the type of credit chosen, with rates of 7% in traditional banks compared to the cost of 25% that has been reached for financing credit card purchases.
The increase in consumer financing and the cost of mortgages, added to the effect of inflationhas caused a “drastic” reduction in the disposable income of Spanish families and in the savings ratewhich stood at 7.2% of gross disposable income in 2022, 6.6 percentage points less than the previous year and at a minimum since 2018.
The Negotiating Agency advises that this “limit situation” has caused many families to face difficulties in covering their financial paymentswhich has led to a 30.8% increase in credit grouping operations requests in the first quarter of 2023.
The grouping of credits makes it possible to reduce up to 68% the interest paid for the financing as a whole, and thus it has established itself as the most efficient procedure for financial products whose amortization is unattainable, such as ‘revolving’ cards.