I received a letter stating that I have been pre-approved for a credit card with a high credit limit and a low annual percentage rate. What does this mean? Generally, when you are "pre-approved" for a credit card, it simply means that a preliminary review of your credit record by the card company indicates you may meet the criteria it seeks in a customer. You are not absolutely guaranteed to receive a card -- or the credit limit, interest rate, or other terms featured in the promotion. 

You will only receive the card if you apply and if you meet other criteria that the card company has established. These other criteria -- including making sure that your credit record has not deteriorated since you were selected for the offer -- will determine whether you get the card, and if you do, the credit limit, interest rate, and other terms for the card.

You should read the promotion very carefully before applying.


The bank keeps calling me about applying for a credit card. I told them to stop, but they keep calling. Can the bank do this? Contact the bank in writing, requesting that they stop the solicitation calls.

Another way to reduce solicitations: Register on the National Do Not Call Registry. There are two ways to sign up:

* Register online for the National Do Not Call Registry.
* Register by phone at 1-888-382-1222


The bank sent me a preapproved credit card offer that I didn't request. Isn't this against the law? Generally, credit cards may be issued only in these three instances:

* in response to an oral or written request,
* in response to an application, or
* as a renewal of or substitution for a credit card that has already been accepted by the customer.

Receiving an unsolicited card could mean that a third party has applied for the card after stealing your identity. To see if this is the case, start by contacting the bank to inquire about the new card and why you received it. If you suspect identity theft, you should order a copy of your credit report. You can order one free credit report every 12 months through www.annualcreditreport.com or by calling 1-877-322-8228. 

If you believe you are a victim of identity theft:

* Place a fraud alert on your credit reports by calling one of the credit reporting agencies (you need only call one; the alert will be shared among all three).
o TransUnion: 1-800-680-7289
o Equifax: 1-800-525-6285
o Experian: 1-888-EXPERIAN (397-3742)
* Close the accounts that you know, or believe, have been tampered with or opened fraudulently.
* File a complaint with the Federal Trade Commission at 1-877-ID-THEFT (438-4338) or online at:

https://www.ftccomplaintassistant.gov/
* File a report with your local police or the police in the community where the identity theft took place.


I was contacted by phone to apply for a credit card. The representative discussed a low interest rate and I agreed. But when I received the credit card, the rate was higher. Can the bank do that? Yes, the bank can call you and offer you a credit card that has an interest rate that will vary depending on your creditworthiness. However, the representative must tell you about the potential for a different rate to apply or you must be able to cancel the card without being charged any fees.

Generally, the bank will review your credit report and the information you provide to determine if you meet the criteria for the offer and then will determine the interest rate that will apply to your account.

The representative should have told you either:

* The specific rates that would apply to the account or
* The range of rates that could apply and informed you that the rate for which you qualify will depend on your creditworthiness and maybe other factors.

The only exceptions to this requirement are:

* Where you are not required to pay a fee to get or keep the card or,
* If the account has such a fee; the bank gives you thirty days after you requested the card to reject the plan.

If you do not want to keep the account because of the interest rate you received, you can contact the bank and cancel the account.

What your credit card company has to tell you: * When they plan to increase your rate or other fees. Your credit card company must send you a notice 45 days before they can:

*increase your interest rate;
*change certain fees (such as annual fees, cash advance fees, and late fees) that apply to your account; or
*make other significant changes to the terms of your card.

If your credit card company is going to make changes to the terms of your card, it must give you the option to cancel the card before certain fee increases take effect. If you take that option, however, your credit card company may close your account and increase your monthly payment, subject to certain limitations.

For example, they can require you to pay the balance off in five years, or they can double the percentage of your balance used to calculate your minimum payment (which will result in faster repayment than under the terms of your account).
The company does not have to send you a 45-day advance notice if
o you have a variable interest rate tied to an index; if the index goes up, the company does not have to provide notice before your rate goes up;
o your introductory rate expires and reverts to the previously disclosed "go-to" rate;
o your rate increases because you are in a workout agreement and you haven’t made your payments as agreed.
* How long it will take to pay off your balance. Your monthly credit card bill will include information on how long it will take you to pay off your balance if you only make minimum payments. It will also tell you how much you would need to pay each month in order to pay off your balance in three years.

New rules regarding rates, fees, and limits

* No interest rate increases for the first year. Your credit card company cannot increase your rate for the first 12 months after you open an account. There are some exceptions:
o If your card has a variable interest rate tied to an index; your rate can go up whenever the index goes up.
o If there is an introductory rate, it must be in place for at least 6 months; after that your rate can revert to the "go-to" rate the company disclosed when you got the card.
o If you are more than 60 days late in paying your bill, your rate can go up.
o If you are in a workout agreement and you don't make your payments as agreed, your rate can go up.
* Increased rates apply only to new charges. If your credit card company does raise your interest rate after the first year, the new rate will apply only to new charges you make. If you have a balance, your old interest rate will apply to that balance.
* Restrictions on over-the-limit transactions. You must tell your credit card company that you want it to allow transactions that will take you over your credit limit. Otherwise, if a transaction would take you over your limit, it may be turned down. If you do not opt-in to over-the-limit transactions and your credit card company allows one to go through, it cannot charge you an over-the-limit fee.
o If you opt-in to allowing transactions that take you over your credit limit, your credit card company can impose only one fee per billing cycle. You can revoke your opt-in at any time.
* Caps on high-fee cards. If your credit card company requires you to pay fees (such as an annual fee or application fee), those fees cannot total more than 25% of the initial credit limit. For example, if your initial credit limit is $500, the fees for the first year cannot be more than $125. This limit does not apply to penalty fees, such as penalties for late payments.
* Protections for underage consumers. If you are under 21, you will need to show that you are able to make payments, or you will need a cosigner, in order to open a credit card account.
o If you are under age 21 and have a card with a cosigner and want an increase in the credit limit, your cosigner must agree in writing to the increase.

Changes to billing and payments

* Standard payment dates and times. Your credit card company must mail or deliver your credit card bill at least 21 days before your payment is due. In addition:
o Your due date should be the same date each month (for example, your payment is always due on the 15th or always due on the last day of the month).
o The payment cut-off time cannot be earlier than 5 p.m. on the due date.
o If your payment due date is on a weekend or holiday (when the company does not process payments), you will have until the following business day to pay. (For example, if the due date is Sunday the 15th, your payment will be on time if it is received by Monday the 16th before 5 p.m.).
* Payments directed to highest interest balances first. If you make more than the minimum payment on your credit card bill, your credit card company must apply the excess amount to the balance with the highest interest rate. There is an exception:
o If you made a purchase under a deferred interest plan (for example, "no interest if paid in full by March 2012"), the credit card company may let you choose to apply extra amounts to the deferred interest balance before other balances. Otherwise, for two billing cycles prior to the end of the deferred interest period, the credit card company must apply your entire payment to the deferred interest-rate balance first.
* No two-cycle (double-cycle) billing. Credit card companies can only impose interest charges on balances in the current billing cycle.

Disclaimer:

Credit cards issued primarily for business or commercial purposes generally are not governed by the consumer protections in the Truth in Lending Act or the amendments to that act in the Credit Card Accountability, Responsibility, and Disclosure Act of 2009.