Legal Question in Business Law in Massachusetts

Re: Credit card company withholding bankcheck

Are you saying they won't up your spending limit until 10 days have gone by from when they get a payoff check? Or are you saying that they don't even credit your account for 10 days, and hence even after your bank has debited your account? If the former, yes, it's legal. If the latter,

I don't think it's "legal" ... UNLESS it is written very specifically in your agreement with them; then it might be legal but it's still a questionable practice. 10 days is too long, I think. And for them to reflect your payment AFTER the date they deposited the check (and received a "provisional credit" from their bank!) is WRONG. (Ironically, it can take 10 days easily to find out if the check has bounced, but that's not the point.) Meanwhile they're taking advantage of the float and even possibly charging you late fees, penalties, and extra interest while they already have the credit in "their" account.

Now the question is ... so what? If it's illegal, you might only get them to stop by bringing a suit (for which your damages are a few bucks) or a class action lawsuit (for a lot more, presumably). But someone has to fund the litigation either way.

You have other options: transfer to a different credit card; transferred balances often go at a low rate for 6 months, too, in case you can't afford to just pay it off.

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