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§8.05 Song-Beverly Credit Card Act—Requirements

 
Lesson 8:
Credit Cards

The Song-Beverly Credit Card Act [CC §§1747 et seq] covers the rights and responsibilities respecting the issuance and use of credit cards. The Act’s provisions are intended to be similar to and be interpreted to conform to the federal Truth-in-Lending Act [15 USC §§1601 et seq], and any regulation or interpretation promulgated under it. [CC §1747.01.] Any waiver of the Act’s provisions is contrary to public policy and is void and unenforceable. [CC §1747.04.]

The Credit Card Act imposes many requirements on a credit card issuer. Some of the more significant include:

  • No credit card may be issued unless requested or applied for or in renewal or substitution of an existing card. [CC §1747.05(a).]
  • An issuer must respond in a timely manner to all cardholder inquiries. [CC §1747.40.]
  • An issuer must correct all billing errors within the shorter of two complete billing cycles or 90 days of an inquiry. [CC §1747.50.]
  • In response to a cardholder’s request, an issuer must send a statement of the amount of interest paid or finance charges within 30 days of the request, unless the card is issued in connection with a retail installment account. [CC §1748.5.]
  • An issuer must disclose in any application form or preapproved written solicitation for an open-ended credit card account (1) the periodic rate, annual fee, transaction fee, and “free-ride” period; or (2) information that satisfies the initial disclosure requirements of federal Regulation Z. [CC §1748.11(a); see CC §1748.22 (charge card disclosures).]
  • An issuer must warn that making the minimum payment will increase both the interest to be paid and the time it takes to repay the balance. [See CC §1748.13.]
  • Electronically printed receipts must contain only the credit card’s last five digits. [CC §1747.09(a); see 15 USC 1681c(g), 1681n (part of FACTA, the Fair and Accurate Credit Transactions Act).]

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