The cardholder agreement |
By David Pilley on October 25, 2010
.jpg.aspx?width=75&height=75) Whenever you get a new credit card in the mail, you will also receive a lot of additional paper. You might be tempted to throw it out, but don’t! This is the cardholder agreement, and it contains everything you need to know about your card, how to use it, and penalties you will incur if you use it incorrectly.
The cardholder agreement contains all the fine print about your card, and it will be divided into numerous sections. The first part will give a list of terms and their definitions so you can understand what they mean. For example, it will explain that “the bank” means the specific entity who has issued you the card, “cash limit” is the maximum amount of cash you can withdraw on your card, the “principal cardholder” is the person who has been issued the card, and so forth. These terms are important to know, especially if you get into legal trouble with your card.
The next section will contain information about the usage of the card. It will tell you where the card is accepted and where it is invalid, and it will also tell you how long the card is good. You will also be told about entrance or annual fees, and whether they are subject to change by the bank issuing you your card. The card must be signed by you, if you are the principal cardholder, you are liable for all charges on the card, and you must notify your bank of any change in address. Finally (and most importantly), you will be assigned a spending limit and, unless approved by the bank, you can never exceed this limit.
You will also be told about where you can use the card. Some merchants may enforce a service charge if you use the card there. If you use cash advance, the agreement will also tell you of fees added to this type of usage. It will also tell you about any fees if you use the card at an ATM. You will also be told about late payment fees and any other penalties that may be assessed.
Billing is another important part in the agreement. Your cardholder agreement will tell you when to make your payment. It will also tell you about the minimum monthly payment you can make, as well as the APR on any outstanding balance.
It’s possible that you will lose your credit card. The cardholder agreement will tell you everything you need to know if this happens, including reporting any possible theft or illegal transactions to your bank. You can view an example of a cardholder agreement here. And if you ever get a real one, do not throw it out!
|
Current Rating: 0 (0 ratings)