Read the Terms of Your Credit Card

The terms of your credit card can be important. It may say that they can cancel the card if you don’t use it every 6 months, and if they cancel the card, that could hurt your credit score. When you apply for a credit card, the terms on the account aren’t etched in stone. In broad layman’s terms, that [credit card] contract basically says the bank can do quite a lot of things, including changing the conditions.

Generally, issuers must notify you about significant changes to your account 45 days in advance. But you might not get a heads-up if:

• You already agreed to certain changes. For example, your issuer might not warn you about an interest rate increase due to a hike in the prime rate. That’s because when you applied for a card with a variable interest rate, you agreed to changes like these. Likewise, you probably won’t get a reminder if a 0% interest period is about to expire.
• You’re behind on payments or haven’t used your account for several months. In this case, issuers usually can close your account, causing you to forfeit any accumulated rewards, or reduce your limit without warning. However, they’re still generally required to give you 45 days’ notice before tacking on penalties related to exceeding a newly reduced limit. Typically, you’ll also get at least 45 days’ notice if your issuer is increasing your interest rate because you’ve fallen behind on payments.

Issuers also are generally required to provide reasons for negative changes if those changes affect only some of its accounts, not all. If you don’t understand why your issuer is modifying your account, call and ask.

Carolyn Secor P.A. focuses its practice in the areas of Bankruptcy and Foreclosure Defense in Clearwater, Florida. For more information, go to our web site www.BankruptcyforTampa.com or call 727-254-1704.