The Hamburg Consumer Center advises caution when concluding credit agreements. Given the significantly increased costs for energy and food, consumers often need additional money to finance important purchases or even their living expenses. But consumer advocates warn that credit traps lurk behind some of the offers from banks, savings banks and other financial service providers.
On the occasion of World Consumer Day on March 15th, the Hamburg Consumer Center is clarifying about credit offers that can be particularly problematic for those affected.
Credit trap No. 1: The overdraft facility
The overdraft facility, colloquially known as “overdraft facility” or just “overdraft facility,” is the overdraft option limited to a fixed amount granted by credit institutions on a current account. However, banks and savings banks charge high interest rates for this financial flexibility. The average interest rate was around ten percent at the end of 2022.
Credit trap No. 2: Short-term or mini loans
Short-term or mini loans of up to a maximum of 199 euros promise quick financial help. Usually even without sufficient creditworthiness. However, they are not consumer loans in the classic sense. This means they are also subject to less strict procurement guidelines. This makes mini-loans particularly interesting for consumers without sufficient creditworthiness or in a financially strained situation - but at the same time they are so dangerous.
Credit trap No. 3: Schufa-free loans
Loan without a credit check! For many people in debt, this offer sounds like a last resort. Dubious providers take advantage of this. In return for a processing fee or a brokerage commission, they promise to send documents to conclude the contract. But those affected usually do not receive a loan and the money transferred in advance is also gone.
The Hamburg Consumer Center has put together other credit traps such as “Buy now, pay later”, “Zero percent financing” or “Credit cards with installment payment functions” on their website .
“A lot of people are currently coming to our advice with money worries or debts,” says Kerstin Föller from the Hamburg Consumer Center. “They are looking for solutions to their financial problems and are particularly receptive to loan offers that sound tempting.” The consumer advocate warns against rushing into a loan agreement. “It’s better to sleep one night about the decision,” says Föller. “And very important: read the contract carefully and understand it before it is signed. If in doubt, you should seek independent advice.”
“It is better to sleep one night about the decision. And very important: read the contract carefully and understand it before it is signed. If in doubt, you should seek independent advice.”
Kerstin Föller, Hamburg Consumer Center
About World Consumer Day
World Consumer Day is an international day of action to draw attention to the rights and needs of consumers. It takes place annually on March 15th. The consumer advice centers use the day to point out grievances and to offer those seeking advice information and assistance on changing topics - this year the “price crisis!”
Source:
Hamburg Consumer Center
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