Credit Cards Law and Legal Definition
A credit card is any type of arrangement or agreement in which any domestic lender or credit card bank, whether directly or indirectly through any domestic lender acting as its agent, gives a debtor the privilege of using a credit card or other credit instrument of any type in transactions out of which debt arises. The debt may arise by the domestic lender or credit card bank honoring a draft or other order, whether written, verbal or electronic, for the payment of money and which is created, authorized, issued or accepted by the debtor or by the domestic lender or credit card bank paying or agreeing to pay the debtor's obligation.
State and federal laws govern charges for interest, finance charges, cash advances, charges for extensions of credit in excess of pre-established limits, late fees or delinquency charges, premiums on credit life and credit accident and health insurance, annual fees and other charges and fees. Congress passed the Consumer Protection Act in part to regulate the consumer credit industry. It requires creditors to disclose credit terms to consumers. The Act prohibits discrimination based on sex or marital status in the extending of credit. The Act also regulates certain debt collectors. Another federal statute, the Fair Credit Reporting Act, was enacted in 1970 to protect the rights of consumers, and regulate the practices of those who provide information to the credit reporting agencies, the agencies themselves and credit report users.