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How is a credit card considered a written contract instead of an open account?

I am being sued by a collection agency for an old (over 3 years) Visa credit card debt. I live in Alabama and the Statue of Limitations on Open Accounts is 3 years. I hired an attorney but he says that I probably will have to settle because it is not an open account but a written contract account which has a SOL of 6 years. He says this because the collection agency produced a piece of paper that I signed when I opened the account (basically it’s the credit card application). I researched on my own and most information that I found says that credit cards are always open accounts. I did find one place (Wiki Answers) where someone said that credit cards could be written contracts. Is my attorney wrong or can this indeed be a written contract in some way. I really need to know before I go to court. Please give me some type of solid backup to your answer and not just your opinion.

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2 Responses to “How is a credit card considered a written contract instead of an open account?”

  1. OC1999 said :

    Credit card are defined as an Open Ended account..Your attorney is incorrect. Credit cards are established as Open Ended accounts under the Truth In Lending Act.

    TITLE 15 > CHAPTER 41 > SUBCHAPTER I > Part A > § 1602
    § 1602. Definitions and rules of construction(i) The term “open end credit plan” means a plan under which the creditor reasonably contemplates repeated transactions, which prescribes the terms of such transactions, and which provides for a finance charge which may be computed from time to time on the outstanding unpaid balance. A credit plan which is an open end credit plan within the meaning of the preceding sentence is an open end credit plan even if credit information is verified from time to time.

    This is a Federal Statute and as far as I am aware there is no state law or regulation that would override this. However, I also do not know specifically about Alabama Laws. You may want to consult a couple more attorneys to get their opinions. If the attorney for the creditor is good enough they may be able to make a case(right or wrong) that it is a written contract, and if you have an attorney going in that says it is a written contract you may not have much of a defense.

  2. Maggie said :

    Sorry I can’t give you a definite answer, but if the Alabama courts have found credit cards to be a form of a written contract, then article 2 of the UCC would be irrelevant. I’ve found anecdotal evidence to suggest this is the case, but nothing firm. I did find examples of other cases in other states where the courts ruling seemed contraindicative of the UCC, and was based partly on UCC limitations – meaning it looks like there definitely is a chance (depending on EXACTLY what was included in that signed piece of paper the collection agency produced) that your credit card account qualifies as a written contract.

    If you’re unsure, you could try contacting another attorney from Legal Aid for a free second opinion, although I doubt your attorney would give such seriously erroneous information. I know that there legal fees are ginormous, but why not ask him to spell it out to you, show you previous cases where this ruling was upheld, etc.


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