What's in Your Credit Card Agreement

Concerned woman reading papers
••• © pawel.gaul / Creative RF / Getty

A credit card is just a way to access a credit account the bank has made available to you. The credit account comes with some strings, which are outlined in your credit card agreement. The credit card agreement is a contract that outlines the terms, conditions, pricing, and penalties of the credit card.

By using your credit card or not canceling within a certain amount of time after receiving it, you're agreeing to the terms in the credit card agreement, to which you have no input. The credit card issuer can change the terms at any time, with advance notice, and continuing to use your credit card signals that you agree to the changes in the terms. You may be able to reject certain parts of your credit card agreement, like the arbitration clause, but it depends on the credit card issuer.

What's in a Credit Card Agreement

Credit card agreements are far from exciting to read, unless you happen to like knowing the terms of credit cards. But, since a credit card agreement is a legally binding contract, you need to know what you're agreeing to.

The credit card agreement will list pricing information for the credit card:

  • the annual percentage rate for each type of balance that can be carried – purchases, balance transfers, and cash advances - and the penalty rate if it applies
  • the index rate to which a variable rate is tied, e.g. the prime rate
  • finance charge information including the minimum finance charge, the finance charge calculation method, and when you may not be charged a finance charge
  • grace period
  • the fees you can be charged and when they will be charged

The features listed above are the minimal amount of information included in a credit card agreement.

These documents are usually far more lengthy and spell out every detail of your credit card including:

  • your credit limit and information about how your credit card issuer can change it
  • details about using your credit card in another country
  • how your minimum payment is calculated
  • options for paying your credit card balance and how your payments are applied
  • how your credit card is reported to the credit bureaus
  • how your information is shared or kept private
  • changes the credit card issuer can make to your account
  • what constitutes default and what happens if you default
  • how to handle a lost credit card
  • how to close your account
  • how to handle billing disputes with the credit card issuer
  • the legal body who enforces the credit card agreement

How to Find Your Credit Card Agreement

Federal law requires all credit card issuers with more than 10,000 credit card accounts to list a copy of their credit card agreements online. Your credit card issuer should also provide you with a copy of the credit card agreement for your account when you request it. Finally, the Consumer Financial Protection Bureau maintains a database that includes generic credit card agreements from more than 300 credit card issuers.