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

Does the bank have to give me advance notice of changes to my line of credit?

Yes, in many cases.  If you have a line of credit that is not secured by real estate, the bank must provide a written notice to each affected consumer when:

• there are changes to terms that are required to be disclosed up front (such as rates and many fees), or
• the required minimum payment is increased.

The notice must be mailed or delivered at least 45 days before the effective date of the change.

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 must provide notice before the change becomes effective.

Also, there are some cases when no notice is required.  For example, if you have a variable rate that is tied to an index and the index goes up, the bank does not have to provide you a notice of the 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 your 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