we are increasing rates on our credit card so we are offering an opt out of the change. If the consumer doesn't want to accept the change we are converting their balance to a closed end loan amortized over 5 years at their current rate.

1. If there is a cash advance balance at 9% and a purchase balance at 7% - can we charge the 9% on the 5 year closed end loan or do we need to have 2 separate loans?

2. Can we just turn off the credit available on the credit card and leave the loan under that loan number or do we need to refinance into a new loan number and provide closed end disclosure? If so, do they need to sign this new loan document or is the coupon they sign stating they want to opt out good enough?

Thank you

1. You cannot raise the rate on the purchase balance portion of the balance. I do not understand your statement about 2 separate loans. You don't convert these to closed-end loans - the plan remains an open-end loan subject to the periodic statement requirements. You just freeze the APRs, don't allow future draws and adjust the payments so the balance amortizes in no less than five years.

2. See answer above.