What many experts and consumers have hardly dared to hope for, seems now at least in some banks. Indeed, some credit institutions have lowered their discretionary interest rates, which is explained by experts above all by the ECB’s recent reduction of the prime rate.
However, in particular consumer advocates continue to criticize the still on average very high discretionary interest rates, after all, banks can lend themselves in vain for now by the European Central Bank money.
What initially sounds very positive, namely that some banks reduce their interest on discretionary, looks on a closer look, much sober. Indeed, most reductions in this area are minimal and range between 0.1 and 0.25 percent. There are some larger banks, which have already announced a reduction in discretionary interest by only 0.1 percent, which is relatively ridiculous in principle due to the key interest rate of 0.0 percent.
After all, these larger banks still demand between ten and twelve percent for the use of the disposition credit. Against this background, for example, the party of the GREENS once again affirmed its demand that there should be legal caps on discretionary interest. The consumer advocates have been fighting for a few years for such a scheme, which would at least ensure that there are no discretionary interest in the double-digit percentage range.
Numerous consumer advocates criticize the discretionary interest that they currently absolutely not fit the other interest rate environment. While there is generally a clear low interest rate level on the capital market and, for example, investors are barely receiving 0.3 per cent for overnight money or time deposit accounts, banks are still picking up sharply on overdraft rates.
Even with real estate loans and installment loans, the loan interest payable has been significantly reduced in recent years, only the debit interest for an approved overdraft of the current account seems to be inviolable by the banks.
That it would be relatively expensive for them to keep their money readily available at all times. Although the account holder has the opportunity to call up the promised credit line at any time, in the opinion of many consumer advocates and other experts, this can not justify the demand for a double-digit interest rate.
Nonetheless, the banks are constantly drawing attention to the fact that the discretionary credit should in any case serve only to bridge financial shortages in the short term, whereas in the case of longer-term financing, it would make more sense to avail itself of the much cheaper installment loan.