Your Rights as a Credit User

Federal laws protect your rights as a user of credit, provided you live up to your side of your credit agreements by paying what you owe on time. You're also protected against inaccurate bills and creditors are required to respond to your inquiries if you send them a letter.

The most recent law, which took effect in 2010, puts restrictions on credit card fees and interest rate policies, among other things. Here's a summary of the important points:

  • Creditors must provide you with a written notice 45 days prior to increasing interest rates or making other significant changes like raising fees. However, they can raise your rate without notice if:

    • The interest rate varies with an index.

    • You fail to comply with the credit card terms by paying late.

  • Any low introductory rate must last at least six months, but the rate can then be changed without notice.

  • You have the right to cancel a credit card before an increase in interest rates or changes to any terms go into effect. You can opt out of any interest rate increase and continue to pay off your balance at the current rate for up to five years, though you're not able to charge anything more to that card.

  • Creditors may not charge more than $25 for a late payment unless you have a history of paying late.

  • Creditors may not increase interest rates on your outstanding balances.

  • Creditors must disclose, on each billing statement, the due date, the late payment fee and penalty that will apply if the payment is received after that date.

  • Creditors must disclose a "Minimum Payment Warning" on each billing statement illustrating that paying just the minimum will increase the interest you pay and the time it takes to repay your balance.

  • Creditors may not charge you a fee for making a payment except for payments involving an expedited service by a service representative of the creditor. For example, if you call the creditor to make a payment by phone on the actual due date, you may be charged a fee.

  • Creditors may not open a credit card account or increase a credit limit without considering your ability to make the required payments under the terms of the account.

  • Creditors may not grant you credit if you are under 21 years of age, unless you have a co-signer or have submitted evidence of your ability to make the payments.
Always save your credit card receipts and check them against your billing statement when it arrives. Call your card issuer immediately if you find a charge you didn't make.