Replenishment of a credit card line

Around this time of year, sometimes members will pay off a large balance on a credit card account. Perhaps they received a substantial annual or holiday bonus. Maybe they have a generous family member who gave them a gift, or want to use savings to get started on a New Year’s resolution. Regardless of the reason, credit unions sometimes ask about handling large check payments and at what point is the credit union required to credit the amount paid by the member to the account, or then replenish the line of credit.

Regulation Z does have a provision on handling payments for open-end lines of credit – including credit cards. Specifically, section 1026.10 requires crediting a payment as of the day of receipt, with some exceptions:

          §1026.10   Payments.

a. General rule. A creditor shall credit a payment to the consumer’s account as of the date of receipt, except when a delay in crediting does not result in a finance or other charge or except as provided in paragraph (b) of this section.

Note that the credit union can delay crediting a payment if the delay does not result in the member incurring a finance charge or other fee. The staff commentary to the rule provides some clarity. In general, the rule does not require posting the payment on any particular date – the rule requires crediting the payment “as of” the date of receipt.

 

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