Like the iTunes End User License Agreement, very few people are likely to read all the provisions of their credit card agreement. Though a majority of it is benign provisions and definitions that make sure the issuer is protected against loopholes, many aspects of it can have a profound impact on credit card users and their finances. All agreements can be accessed through an online database maintained by the Consumer Financial Protection Bureau (CFPB). After reading through dozens of such contracts, we found 4 of the biggest clauses worth highlighting.
- Mandatory Pre-Dispute Arbitration. Nestled away in most credit card contracts is a small section saying you agree to bypass a judge or jury in the event of a dispute between you and the card issuer. Instead, any disagreements must be settled by a third-party arbitrator. This agreement also prevents you from joining class action lawsuits against the issuing bank. Recently, the CFPB has taken aim at mandatory arbitration clauses, claiming they are unfavorable to consumers. According to Richard Cordray, head of the bureau, "by inserting an arbitration clause into their contracts, companies can sidestep the legal system, avoid big refunds and continue to pursue profitable practices that may violate the law and harm consumers."
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