Question : How is a credit card considered a written contract instead of an open account?
I am being sued by a collection agency for an old (over 3 years) Visa credit card debt. I live in Alabama and the Statue of Limitations on Open Accounts is 3 years. I hired an attorney but he says that I probably will have to settle because it is not an open account but a written contract account which has a SOL of 6 years. He says this because the collection agency produced a piece of paper that I signed when I opened the account (basically it's the credit card application). I researched on my own and most information that I found says that credit cards are always open accounts. I did find one place (Wiki Answers) where someone said that credit cards could be written contracts. Is my attorney wrong or can this indeed be a written contract in some way. I really need to know before I go to court. Please give me some type of solid backup to your answer and not just your opinion.
- asked by rich61969
All Answers:
Answer #1
Credit card are defined as an Open Endedaccount..Your attorney is incorrect. Credit cardsare established as Open Ended accounts under theTruth In Lending Act.TITLE 15 > CHAPTER 41 >SUBCHAPTER I > Part A > § 1602§ 1602.Definitions and rules of construction(i) The term“open end credit plan” means a plan underwhich the creditor reasonably contemplatesrepeated transactions, which prescribes the termsof such transactions, and which provides for afinance charge which may be computed from time totime on the outstanding unpaid balance. A creditplan which is an open end credit plan within themeaning of the preceding sentence is an open endcredit plan even if credit information is verifiedfrom time to time.This is a Federal Statute and asfar as I am aware there is no state law orregulation that would override this. However, Ialso do not know specifically about Alabama Laws. You may want to consult a couple more attorneys toget their opinions. If the attorney for thecreditor is good enough they may be able to make acase(right or wrong) that it is a writtencontract, and if you have an attorney going inthat says it is a written contract you may nothave much of a defense.
- answered by OC1999
Answer #2
Sorry I can't give you a definite answer, but ifthe Alabama courts have found credit cards to be aform of a written contract, then article 2 of theUCC would be irrelevant. I've found anecdotalevidence to suggest this is the case, but nothingfirm. I did find examples of other cases in otherstates where the courts ruling seemedcontraindicative of the UCC, and was based partlyon UCC limitations - meaning it looks like theredefinitely is a chance (depending on EXACTLY whatwas included in that signed piece of paper thecollection agency produced) that your credit cardaccount qualifies as a written contract. Ifyou're unsure, you could try contacting anotherattorney from Legal Aid for a free second opinion,although I doubt your attorney would give suchseriously erroneous information. I know thatthere legal fees are ginormous, but why not askhim to spell it out to you, show you previouscases where this ruling was upheld, etc.
- answered by Maggie
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