Business Credit Card Agreement and Addendum

Transcription

1 Chapter 9: Business Credit Card Agreement and Addendum The Business Credit Card Agreement and Addendum supports either a MasterCard or Visa card program, or both card programs with one disclosure. The language is written for business accounts and is appropriate for use with business members that are either sole proprietors or other types of business organization structures. Document Description When used: Purpose: Document number: How distributed: Imprinting: Number of pages: State specific versions: The Agreement must be used when a business credit card is issued. The Addendum provides rate and fee information plus credit card program attributes unique to each credit union. The Agreement is used to provide required disclosures that apply to all business credit card holders and the rights and responsibilities of the business. BXC10* - Visa and MasterCard Business Credit Card Agreement and Addendum BXCM1* - MasterCard Business Credit Card Agreement and Addendum BXCV1* - Visa Business Credit Card Agreement and Addendum The credit union must use a Business Loan Application that includes a credit card election. Plus an Authorization Designation document may be needed to clearly identify who the business is authorizing to establish or access the account. Credit Union(s) should retain a copy of the Business Credit Card Agreement. The Agreement and Addendum allow an imprint of your credit union s name, address, phone numbers and logo. Eight None * Indicates space holder for version number CUNA Mutual Group 55

2 Chapter 9 Page one sample Use the numbers provided to locate the corresponding instructions on the next page. 56 LOANLINER Small Business Lending User Guide

3 Business Credit Card Agreement and Addendum Page one instructions Instructions are given for each section of the document. Please refer to the corresponding number on the sample document to determine each section s relative position on the document. 1. Persons Bound. This section informs the business member that they are bound to the Agreement by signing a Business Loan Application, by using the card or authorizing others to use the card. 2. Using Your Account. This section outlines account approval including: Establish line of credit Establish credit limit Imposing over-the-limit fees Cash advances (if permitted) Convenience checks (if permitted) Stop payment 3. Statement of Business Purpose. This section informs the business member that this account is for business purposes only. CUNA Mutual Group 57

4 Chapter 9 Page two sample Use the numbers provided to locate the corresponding instructions on the next page. 58 LOANLINER Small Business Lending User Guide

5 Business Credit Card Agreement and Addendum Page two instructions Instructions are given for each section of the document. Please refer to the corresponding number on the sample document to determine each section s relative position on the document. 4. Using your Card. This section informs the business member about card use including: Purchases Internet purchases Cash advances (if permitted) Illegal transactions 5. Responsibility. This section outlines agreement to pay all charges to the account. 6. Interest Rate. This section informs the business member that Interest Rates are disclosed on the Addendum and can include: Introductory rate Fixed vs. variable rate Penalty rate 7. Finance Charge Calculation Method for Purchases. This section informs the business member of the Average Daily Balance Method for Purchases. It outlines: How Interest Rate is calculated How to avoid incurring finance charges for purchases/cash advances Grace period Cash advance fees and rates CUNA Mutual Group 59

6 Chapter 9 Page three sample Use the numbers provided to locate the corresponding instructions on the next page. 60 LOANLINER Small Business Lending User Guide

7 Business Credit Card Agreement and Addendum Page three instructions Instructions are given for each section of the document. Please refer to the corresponding number on the sample document to determine each section s relative position on the document. 8. Finance Charge Calculation Method for Cash Advances. This section informs the business member of the Average Daily Balance Method for Cash Advances. It outlines: When the finance charge begins How cash advance finance charge is computed How average daily balance is calculated 9. Other Charges. This section informs the business member of additional fees that may be imposed on the account. These fees would be disclosed on your Addendum: Cash Advance Fee Balance Transfer Fee Annual Fee Over-the-Limit Fee Returned Check Fee Late Payment Fee Foreign Transaction Fee Card Replacement Fee Document Copy Fee 10. Payments. This section informs the business member of the terms and conditions associated with account payment. CUNA Mutual Group 61

8 Chapter 9 Page four sample Use the numbers provided to locate the corresponding instructions on the next page. 62 LOANLINER Small Business Lending User Guide

9 Business Credit Card Agreement and Addendum Page four instructions Instructions are given for each section of the document. Please refer to the corresponding number on the sample document to determine each section s relative position on the document. 11. Foreign Transactions. This section provides the business member with terms and conditions associated with purchases or cash advances in a foreign country using foreign currency. 12. Collection Costs. This section outlines the business members agreement to pay all collection costs. 13. Security Interest. This section details specific security interests. Pledge of shares All other shares Collateral securing other loans 14. Default. This section explains what constitutes a default, such as: Late payment Broken promise associated with agreement Organization ceases to exist Bankruptcy False or misleading statements in any credit applications 15. Changing or Terminating Your Account. This section provides the terms and conditions associated with changing or terminating the account. CUNA Mutual Group 63

10 Chapter 9 Page five sample Use the numbers provided to locate the corresponding instructions on the next page. 64 LOANLINER Small Business Lending User Guide

11 Business Credit Card Agreement and Addendum Page five instructions Instructions are given for each section of the document. Please refer to the corresponding number on the sample document to determine each section s relative position on the document. 16. Changing or Terminating Authorized Users. This section provides the terms and conditions associated with changing or terminating authorized users. 17. Liability for Unauthorized Use-Lost/Stolen Card Notification. This section provides information on Liability Limitation Rules for Unauthorized Use. 18. Credit Review and Release of Information. This section outlines the authorization of the credit union to investigate your credit standing and/or provide account information to parties that inquire about your credit standing. 19. Returns and Adjustments. This section explains that credit will be given for returns or adjustments. 20. Additional Benefits/Card Enhancements. This section explains that the credit union may offer additional services to your account, at no additional cost to you. CUNA Mutual Group 65

12 Chapter 9 Page six sample Use the numbers provided to locate the corresponding instructions on the next page. 66 LOANLINER Small Business Lending User Guide

13 Business Credit Card Agreement and Addendum Page six instructions Instructions are given for each section of the document. Please refer to the corresponding number on the sample document to determine each section s relative position on the document. 21. Effect of Agreement. This section provides information that maintains that the Agreement is the contact, not other items that may contain different terms. 22. No Waiver. This section explains that a credit union does not lose its rights, just because it may delay enforcing them. 23. Statements and Notices. This section provides the business member with the terms and conditions of Statements and Notices. 24. Notification of Change in Legal Structure, Officers or Owners. This section outlines notification procedures if you change legal structure, owners or officers. 25. Severability and Final Expression. This section provides the terms and conditions associated with severability and final expression. 26. Penalty Rate Disclosures. This section explains when the Penalty Rate is effective. 27. Gambling Transactions Prohibited. This section prohibits use of your card for any type of gambling. 28. Internet Gambling Transactions Prohibited. This section prohibits use of your card for electronic gambling through the Internet. 29. Governing Law. This section provides the terms and conditions associated with applicable governing laws. 30. Notification Information for Reporting Lost, Stolen and Unauthorized Use of Card. This section provides contact information for reporting lost, stolen and unauthorized use of the card. CUNA Mutual Group 67

14 Chapter 9 Page seven sample The Addendum discloses rate, fee information and account terms to your members for your credit card programs. Your credit union can maintain your own Addendum whenever rates and fee amounts change or you can have CUNA Mutual Group make the changes. 68 LOANLINER Small Business Lending User Guide

15 Business Credit Card Agreement and Addendum Page eight sample CUNA Mutual Group 69