Broker Check

Know your rights under credit card laws

July 16, 2021

Your financial institution should provide you with information on credit card laws in your State when you enter into this type of agreement. Granted most of us ignore the small print as we never imagine that one day we may have problems repaying our commitments. We tend to think it will happen to someone else and not us.


But the reality is that with the current financial situation more and more of us are struggling to repay our commitments. We may think that the banks and financial situations will be happy to help. After all a few years ago they were falling over themselves to lend us money. And therein lies the problem. The banks appear to have thrown the lending guidelines and common sense out the window in their pursuit of bigger profits and corresponding bonuses. They lent money to everyone often regardless of whether these people could afford to pay them back.


Now the economic crisis has hit everyone and the banks, instead of trying to work with these same customers and help them to restructure their debts onto a more manageable program, are using whatever means at their disposal to collect their cash.Don't get me wrong. I do believe that if you borrowed money you need to repay it but I also think the banks should own up to their part in this mess and help people rather than persecute them.


So what credit card laws affect you? The Credit Card Reform Act is one of them but it depends on your circumstances and age as to which provisions will apply.


Every State will have laws relevant to their jurisdiction. This could be case law or state law and you need to know about both. If you are having problems repaying your debts, speak to a local charity debt counselor who should know all the relevant details.


Federal law applies to all of us. You will need to understand The Federal Fair Debt Collection Practices Act. As the name implies, this dictates how your creditors can behave when collecting the money due to them.


Whatever you do, don't think that the law is there to help you not to pay your debts. This is not the case and ignoring your creditors is not the best way forward. If you do end up in Court, a Judge is going to look more favorably on someone who has made an effort to repay what they owe. If you have made steady payments and have tried to negotiate with your creditors, he may even force them to enter into an arrangement with you. If you have ignored everyone and buried your head in the mistaken belief that the credit card laws will protect you, you are likely to be dealing with a Judge who feels you are wasting Court time. That is not a good situation and one you should be keen to avoid.


Repaying debt isn't easy but it is often possible. When you simply do not have the assets or cash to repay your creditors there are legal ways of dealing with this such as bankruptcy. But do not enter into any such agreement until you have spoken to a debt repayment expert and know exactly what the implications are.


The credit card laws are there to protect both creditors and you the debtor. Use them wisely.