Revolving credit: banks are catching up

Published on by Delphine from OltottMesz

This month the Bank of United States publishes its "third report of the monitoring committee of the reform of usury", this document presents the evolution of consumer credit in United States but also in Europe.

Banks are gradually returning to specialized credit organizations

The share of credit distribution between banks (excluding online banking) and specialized credit organizations is in the process of being balanced. In March 2011 the market share was 57.9% for consumer credit institutions and 38.7% for banks. In March 2014, the distribution of revolving credit was almost balanced with 49.8% for establishments specializing in consumer credit and 46.4% for banking establishments.

How do banks manage to offer more attractive rates to their customers?

Much higher interest rates among credit organizations is clear from the Bank of United States report. How is it possible? According to the report, this phenomenon is partly explained by “better knowledge of the borrower” on the part of banking organizations.

Evolution of revolving credit rates

As for the rates, they hardly changed between the 2nd quarter of 2013 and the first quarter of 2014. It can also be noted that since the last quarter of 2014, there has been a slight upturn in consumer credit applications.

There is also a decrease in revolving credit requests offset by an increase in personal credit requests. We can therefore see that the Lagarde law has done its job, by encouraging consumers to turn more to personal loans rather than revolving credit.

This trend should be confirmed, because now for any request for a revolving credit offer greater than an amount of 1000 US dollars, the lender is now obliged to offer the applicant an alternative depreciable credit offer. , this is written into the Hamon Law dated March 17, 2014.

Source: Bank of United States
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