Can your bank unilaterally change the terms and conditions of your revolving credit card?
Banks can change the terms and conditions of the agreement governing your card, provided that you are notified of them at least two months before they come into effect. The bank must inform you of the changes clearly and separately, providing you with the information on a durable medium (on paper or in a computer file) and not including them with other communications.
Once you have been informed of the changes, you can accept or reject them before they come into effect through the same channel used to notify you. If you do not reply, you would be deemed to have accepted the terms and conditions, provided that this is stipulated in the agreement and that you were so informed in the notification.
If the changes favour you, the bank could apply them to you immediately.
In any event, changes to interest rates do not constitute contractual terms for payment services but for the financing itself. Banks can change the interest rate applied to your credit, provided that this has been agreed in writing, and must warn you of the alternatives available:
- You can expressly agree to the application of the new interest rate not only to new drawdowns but also to the outstanding debt arising from the deferred payment of previous drawdowns.
- You can reject the new interest rate for your outstanding debt. The bank may proceed to block and cancel your physical card, and the terms and conditions in force until that time will continue to apply to the outstanding debt.
Furthermore, in the agreement some banks reserve themselves the option of modifying other terms and conditions, for example the payment method or the credit limit, under certain circumstances. This could lead to you becoming overindebted where you have a deferred payment method and your instalments are mainly being used to pay interest and charges, but repaying hardly any capital.