Financial services; open-end credit plans, promotional annual percentage rates.

Plain English Breakdown

The official source does not explicitly mention written agreements for exceptions, though it implies that such agreements are possible.

Rules for Credit Card Promotions

This law sets rules for how credit card companies must handle payments when customers have multiple special interest rates on their accounts.

What This Bill Does

• Defines key terms like 'annual percentage rate', 'expiration date', and 'promotional period'.
• Requires credit card companies to apply customer payments first to the balance with the soonest ending promotion if there are multiple promotions.

Who It Names or Affects

• Credit card companies that offer special interest rates for a limited time.
• Customers who have more than one promotional rate on their credit cards.

Terms To Know

Promotional annual percentage rate

A temporary lower interest rate offered by a credit card company during a specific period.

Promotional balance

The amount of money owed on a credit card that is subject to a promotional interest rate.

Limits and Unknowns

• Does not specify what happens if there are multiple promotions with the same expiration date.
• Only applies to open-end credit plans, which typically include credit cards but may exclude other types of loans.

Official Summary Text

Financial services; open-end credit plans; promotional annual percentage rates.
Requires any creditor that permits a consumer to apply more than one promotional annual percentage rate to an open-end credit contract or plan to apply any payment made by the consumer to the promotional balance, as defined in the bill, with the earliest expiration date unless otherwise expressly agreed in writing by the parties.

Current Bill Text

A BILL to amend the Code of Virginia by adding in Article 4 of Chapter 4 of Title 6.2 a section numbered
6.2-435.1
, relating to financial services; open-end credit plans; promotional annual percentage rates.

Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia is amended by adding in Article 4 of Chapter 4 of Title 6.2 a section numbered
6.2-435.1
as follows:

§
6.2-435.1
.
P
romotional
annual percentage rates.

A. As used in this section:

"Annual percentage rate" has the same meaning as in the federal Truth in Lending Act (15 U.S.C. § 1601 et seq.) and its implementing regulations, as they may be amended from time to time.

"Expiration date" means the date on which
a promotional period ends.

"Promotional annual percentage rate"
means a temporary annual percentage rate offered by a c
reditor to a consumer for an open-end credit contract or plan that is lower than the annual percentage rate
applicable to
such plan after
the promotional period
.

"Promotional balance" means
the balance owed by a customer pursuant to an open-end credit contract or plan to which a promotional annual percentage rate applies.

"Promotional period" means a specified duration during which a promotional annual percentage rate is applicable
to an open-end credit contract or plan
.

B.
Any creditor that permits a consumer to apply more than one promotional annual percentage rate to an open-end credit
contract or plan shall
apply any payment made by the consumer
to the promotional balance
with the earliest expiration date

unless otherwise expressly agreed in writing by the parties
.