The Supreme Court (TS) has annulled the contract for a revolving card because the bank increased the interest from 18.9% to 26.89% six months after signing, without any justified reason. In this way, the client will not have to pay the interest charged after that increase and will only return the money she spent with the card and the interest for the first half year.
In this way, the high court agrees with the consumer and revokes the ruling of the Provincial Court of Barcelona, which had considered the contract valid. Thus, the ruling (available at this link from the Judiciary) thus confirms the initial decision of the Court of First Instance no. 54 of Barcelona, which had already declared the contract void for usury.
When an interest is considered usurious
The Supreme Court, based on its doctrine, explains that a revolving card is usurious when its interest exceeds the average market interest by more than six percentage points at the time of signing the contract. To find out this average interest, the judges consult the statistical bulletins of the Bank of Spain, which since June 2010 have published specific data for this type of cards.
In this case, the contract was signed in 2006, before that specific data existed. The Supreme Court determines that in these situations the first available data, that of 2010, which placed the average interest rate (TEDR) at 19.32%, should be used as a reference. Likewise, it indicates that this figure must be corrected upwards between 20 and 30 hundredths to equate it to the APR, the indicator that measures the real cost of credit.
Each interest increase is equivalent to a new contract
The key part of the ruling that must be understood is that the initial interest of 18.9% was not usurious because it was below the 19.32% reference. However, after six months, the bank unilaterally raised it to 26.89%, a figure that exceeds the average market interest by more than seven points.
The Supreme Court applies here the doctrine established in ruling 317/2023, according to which each interest increase decided by the bank must be treated as a new contract for the purposes of the Usury Repression Law. That is, the usurious nature is assessed at each time the bank modifies the rate, not only when the contract was signed.
The high court warns that any other solution would be absurd. “It would be enough for the financial institution to initially set a moderate interest rate so that the credit card contract could not be considered usurious,” the ruling states. Likewise, he adds that the bank could thus avoid usury by setting a low interest rate at the beginning and then raising it without limit.
What consequences does nullity have?
The ruling declares the contract void from the moment of the increase, not from the origin, since during the first six months the interest was not usurious. The plaintiff had requested that it be annulled from the beginning, but the Supreme Court rejected this claim.
In practice, the client must return only the capital she used and the interest corresponding to the first six months, a period in which the initial 18.9% was in force. Everything collected above that amount after the increase to 26.89% is cancelled.