I was contacted by phone to apply for a credit card. The representative discussed a low interest rate and I agreed. But when I received the credit card, the rate was higher. Can the bank do that?

Yes, the bank can call you and offer you a credit card that has an interest rate that will vary depending on your creditworthiness.  However, the representative must tell you about the potential for a different rate to apply or you must be able to cancel the card without being charged any fees.

Generally, the bank will review your credit report and the information you provide to determine if you meet the criteria for the offer and then will determine the interest rate that will apply to your account.

The representative should have told you either:

  • The specific rates that would apply to the account or
  • The range of rates that could apply and informed you that the rate for which you qualify will depend on your creditworthiness and maybe other factors.

The only exceptions to this requirement are:

  • Where you are not required to pay a fee to get or keep the card or,
  • If the account has such a fee; the bank gives you thirty days after you requested the card to reject the plan.

If you do not want to keep the account because of the interest rate you received, you can contact the bank and cancel the account.

July 2010