Cashing In Q&A columns

Credit card ‘change in terms’ often accompany privacy policy


You should look carefully at your credit card’s terms. They can change with just 15 days’ notice, and are often hidden within privacy notices.

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Credit card issuers will often mail out notification of changes to a card’s terms along with the bank’s privacy policy.  But if consumers don’t look carefully, the notice of a change in their credit card’s terms could get lost in the shuffle.

Compare Balance Transfer Credit CardsThe bank may keep you up-to-date on its privacy policy when you open a new account, on an annual basis, or when the privacy policy gets changed.  The credit card issuer’s privacy policy outlines the ways in which the bank collects and uses your personal information, including data on your income, account balance information, and credit history.  The privacy policy likely notes the way your personal information is shared both within the bank and externally — with financial and nonfinancial companies alike.

Additionally, the privacy policy regarding your credit card may explain when your information is shared, such as to protect against fraud, when reporting to a credit bureau, and with your consent.

You may have the ability to request that certain personal information is not shared in specific cases.  Perhaps you do not want nonfinancial companies to get a look at your data, or maybe you would rather that certain branches of your bank not have access to sensitive information about you.  Still, your request may be overridden by the law and certain information may be exempt from your request for protection.

To exercise some power over how the credit card issuer treats your personal information, you will need to get in touch with them.  The bank should provide contact information in the mailing so you can inform them of your privacy policy choices.

While all this privacy policy information is very helpful to the cardholder, you are more likely to be concerned about changes to your credit card terms.  “Change in term” notices are often enclosed along with the mailing that provides information on the bank’s privacy policy.  However, the printed material announcing a change to your credit card terms may be easily overlooked if you think the letter only contains privacy policy information.

An issuer may notify you of changes to a credit card’s terms involving the interest rate, the events which trigger the credit card’s default APR, and various fees.

The notification of a change in the credit card’s terms can also offer you the chance to opt out — that is, the ability to decide you don’t want to continue using the card once the new terms take effect.  Opting out involves notifying the credit card issuer that you do not accept the changes.  You will need to read your opt out information carefully to find out the proper way to opt out. (Update: On Aug. 20, 2009, provisions of the Credit Card Act of 2009 went into effect that mandated consumers be given the right to opt out of increases in interest rates, fees, finance charges and certain other changes in credit card agreements. See story.)

Opting out of card terms that no longer resemble what you signed up for can be a smart decision.  After all, if you applied for a low interest credit card, but the new terms put you in danger of triggering a high default APR, then you may not want to accept the changes to your credit card.

So when you receive a letter from the bank regarding your privacy policy, be sure to also look for information on any changes to your credit card terms.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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