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#2251334 - 03/26/21 07:35 PM Credit Card - Change in Terms - 1 year wait on new
City Girl Offline
100 Club
Joined: Sep 2005
Posts: 159
Midwest
We are moving away from one credit card processor to another. The new processor mentioned that we have to keep track of all new cardholder accounts opened prior to a year of conversion. They stated we cannot change the terms on these cardholders for a year and thus they have to be grandfathered in under their current terms, etc. The credit cards are based on Prime + x and are variable. We disclose that the rate can change.

Does anyone know where this rule is? Is it a credit card rule or TIL rule. The only thing I found related to fixed rate cards (which I believe I found in TILA.)

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#2251336 - 03/26/21 08:01 PM Re: Credit Card - Change in Terms - 1 year wait on new City Girl
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
I am clueless - are you or are they changing terms at the time of transfer on all of these accounts?
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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#2251345 - 03/26/21 09:58 PM Re: Credit Card - Change in Terms - 1 year wait on new rlcarey
City Girl Offline
100 Club
Joined: Sep 2005
Posts: 159
Midwest
Yes, changing rates and fees. Here is what they quoted (what is in bold and italics)

1026.52

(2) Variable rate exception. A card issuer may increase an annual percentage rate when:
(i) The annual percentage rate varies according to an index that is not under the card issuer's control and is available to the general public; and
(ii) The increase in the annual percentage rate is due to an increase in the index.

(3) Advance notice exception. A card issuer may increase an annual percentage rate or a fee or charge required to be disclosed under §1026.6(b)(2)(ii), (b)(2)(iii), or (b)(2)(xii) after complying with the applicable notice requirements in § 1026.9(b), (c), or (g), provided that: (i) If a card issuer discloses an increased annual percentage rate, fee, or

charge pursuant to § 1026.9(b), the card issuer must not apply that rate, fee, or charge to transactions that occurred prior to provision of the notice; (ii) If a card issuer discloses an increased annual percentage rate, fee, or charge pursuant to § 1026.9(c) or (g), the card issuer must not apply that rate, fee, or charge to transactions that occurred prior to or within 14 days after provision of the notice; and (iii) This exception does not permit a card issuer to increase an annual percentage rate or a fee or charge required to be disclosed under § 1026.6(b)(2)(ii), (iii), or (xii) during the first year after the account is opened, while the account is closed, or while the card issuer does not permit the consumer to use the account for new transactions. For purposes of this paragraph, an account is considered open no earlier than the date on which the account may first be used by the consumer to engage in transactions.

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#2251351 - 03/27/21 11:42 AM Re: Credit Card - Change in Terms - 1 year wait on new City Girl
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,227
Galveston, TX
Then that is consistent with §1026.55(b)(3) and (c) if you are changing the interest rate and fees. You cannot do it for a year and any existing balances are protected.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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