Legal Question in Credit and Debt Law in Pennsylvania
credit card exploitation
In Jan 2001, I went over my $500. credit limit on a credit card by less than $200. in a medical emergency that incapacitated me until late 2005. Since 2001, automatic payments to this credit card company have been deducted from a checking account which I have recently closed. I have not used this credit card since 2001 but have made monthly payments starting at $30. a month and expanding to to a current $60. I calculate that I have paid my original debt of less than $700. at least 4 times but this credit card co. still shows a balance of $2500. for me, I own nothing except for my car which I owe payments for the next 4 years. I am 60 years old and renting an apartment. This is my only runaway card. Am I legally liable to continue paying on this card?
2 Answers from Attorneys
Re: credit card exploitation
There is an interesting argument with respect to these credit card interest rates that has not been raised in any case of which I'm aware. I've discussed it with a few of my friends and we all think that it seems to have merit.
Your interest rate on that card is probably about 30%. There is a little known post Civil War statute at 12 U.S.C. � 85 that limits the interest rate that a National Bank can charge to
a rate not exceeding 7 per centum, or 1 per centum in excess of the discount rate on ninety day commercial paper (the prime rate)where a state in which the bank is located does not fix a rate of interest.
In Delaware, where most of these credit card companies are located, there is no rate set for credit cards. The Delaware usury laws expressly do not apply to interest rates on credit cards and the prime rate over most of the past seven or eight years has been less than six percent.
The next statute in the U.S. Code at 12 U.S.C. � 86 also provides that where a higher rate of interest than permitted is charged, the person paying the interest may recover back, in an action in the nature of an action of debt, twice the amount of the interest paid from the association taking or receiving the same.
If you are able to find an attorney local to your area who's willing to help you, I will be happy to discuss this argument with them.
Re: credit card exploitation
it is difficult to answer whether you wer properly credited or not. Obviously interest would continue to accrue on your account while you paid it back. Also it is possible other costs, ie late fees over charge fees may have been added. Still it seems that your account should have decreased over this time. I suggest you gather all your credit statements for the period of time and see whether your payments were properly credited. You may want to consult with an attorney to make sure nothing illegal was done in crediting your account. If you would like to schedule a consultation you can call my office.
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