Answers about Changes to Credit Card Terms and Other Forms of Credit

How must the bank notify me when it changes a significant term on my credit card account?

The bank must provide advance notice in writing when it makes changes to account terms that are "significant" or when it increases the required minimum payment.  An increase in the Annual Percentage Rate and increases in many types of fees are significant changes that require an advance notice. The notice must be mailed or delivered to you at least 45 days before the change becomes effective.

However, there are some cases when the advance notice requirement does not apply.  If you agreed to the change, the bank does not have to provide advance notice, but it has to give you notice before the change becomes effective.

Also, there are some cases when no notice is required.  For example, if you have a variable interest rate tied to an index, and the index goes up, the bank does not have to provide you a notice of an increased rate.  The bank also does not have to provide you notice if your rate is increasing because a promotional rate no longer applies, and the bank already gave you information about the terms of the promotion.  Additionally, the bank does not have to provide you notice if it closes your account, suspends future credit privileges, or reduces your credit line.  The bank does have to provide you a 45-day notice before it imposes a fee or penalty because you exceeded a new, lower credit limit.

Be sure to review your account agreement, which is the contract governing your account. It provides information on changes that may occur to your account.

March 2010