Hey everyone, thanks for taking the time to read my article for this month! Just in case you are new to the first Wednesday of each month here on Top Finance Blog. My name is Joshua Rodriguez and I write about several personal finance related topics like credit cards, credit card debt, credit scores, ect… Anyway, I’m here the first Wednesday of each month so, be sure to come back every month to enjoy the new column.

So, all of that being said, today I’m going to write about credit cards as a result of quite a few emails I’ve gotten recently. In these emails, consumers state something that they’ve gone through and eventually ask, “Can my lender legally do that?” or say something like “I didn’t even know that was legal!”. Here are the most common types of can they do that questions I get…

My Lender Sold My Debt And Didn’t Contact Me…
Can They Really Just Do That?

Credit Crunch
Mike Bitzenhofer via Compfight

Well, the simple answer is yes. But, in all actuality this question is a mute point. Let’s be honest here…before a lender sells your debt to collections and takes the loss that will result in that charge off, wouldn’t you think that they would want to contact you first? Well, of course they would! In most cases where a consumer actually hasn’t been contacted by a lender before a debt is sold to collections, it was the consumers doing that caused this. Most likely, that consumer didn’t answer phone calls or, changed his or her phone number without notifying the lender. The lenders most likely tried to make contact with the debtors in these cases but, were unable to reach them. So, the debt was sold to a collections agency.

My Lender Added Hundreds Of Dollars In Past Interest
After A Promotion Expired…

I’ve gotta be honest here, I get this one quite a bit. And, the answer is, yes! As much as I hate to say it, the truth is, lenders are allowed to charge retroactive interest after promotions if they notified you of the term before the promotion started. This is a scummy lending practice that most credit card lenders don’t take part in but, some make tons of money doing it.

The way it works is, you sign up for a 0% balance transfer credit card after comparing the different offers that appealed to you. In a haste, you simply combed over the terms and conditions of the credit card and applied. Soon you transferred your balance and started enjoying 0% promotional interest rates. But, what you didn’t noticed as you skimmed over the terms and conditions was a small print clause that said, if you didn’t pay your balance off entirely before the promotional period expired, you would be charged backed interest according to the standard terms of the credit card.

Because the lender subtly notified you that this could happen if you didn’t pay off your entire balance, this is 100% legal. This is why, when you compare balance transfer credit cards or any other form of credit cards, it’s so important to read the fine print before applying for any offer!

My Lender Changed My Terms Without Notification…

This one is illegal but, I strongly doubt that notification was not given in some way. Lenders have a great way of sending change in terms notices with credit card statements. These notices might be so subtle that you don’t even pay attention to them and, they end up in the trash. But, the notice was to tell you that your interest rate would be increasing as required by the Cardholder’s Bill of Rights within 45 days of the change.

So, what do you do if you get one of these notices? Well, you have 2 options. You can either agree to the change in terms and just ignore the notice or you can decide to opt out. Unfortunately, in most cases, opting out means that you will have to close your credit card. So, this can be a bit of a tricky decision. If you decide to opt out, your change in terms notice will clearly tell you the steps you need to take to do so.

Thanks For Reading

Thanks for reading everyone! Don’t forget to come back the first Wednesday of September for more!

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