Is there a court decision in Alabama that concluded that credit card accounts are written contracts?

Question

I know that the Federal Truth-In-Lending Act defines credit card accounts as open accounts. However, I have found that if the courts in your state have ruled otherwise, then that ruling takes precedence. I am trying to find a ruling that states that the Alabama courts consider credit card accounts written contracts instead of open accounts. I have heard from an attorney in Alabama who stated that it is indeed a written contract but he did not provide any supporting proof. Can anyone out there provide this information or has anyone been through a court trial regarding collection of a credit card debt that was older than the 3 year Statute of Limitations in Alabama?

Answer 1

Alabama law appears to be contrary to your premise. The Alabama Court of Civil Appeals has ruled that an "account stated" (as opposed to an open account) "is not founded on the original liability, but is a new agreement between parties to an original account that the statement of the account with the balance struck is correct and that the debtor will pay that amount." Even though there is usually a written agreement to extend credit in a credit-card setting, and even though there is a balance statement normally sent by a credit-card issuer each month that activity occurs, it seems that a subsequent agreement would be necessary to take a credit-card balance outside of the open-account statute of limitations.

Answer 2

Many collection agencies are going to court and convincing judges that credit card accounts are written contracts. It all depends on the judge.

The main theory being used is that an open account is a store charge card. It can only be used in that store. Major credit cards like Visa can be used many places and you do sign an agreement.

If you go to court, you need to produce documentation that the credit card is an open account. It really could go either way depending on the judge.

Answer 3

I hope this helps.
Section 5-19-6
Copies of instruments signed by debtors to be furnished to debtors; required statement in contracts, etc.; limitation on disclosure requirements; intent, applicability of limitation.
(a) Any creditor, when extending credit with respect to a consumer credit transaction, other than under an open-end credit plan, shall at that time furnish to the debtor a copy of each instrument executed by the debtor in connection with the consumer credit transaction. The consumer credit transaction contract or note shall contain the following statement in eight point or larger type immediately above the space for the borrower's signature.

"CAUTION - IT IS IMPORTANT THAT YOU THOROUGHLY READ THE CONTRACT BEFORE YOU SIGN IT."