JPMorgan will give an appeal to a lawsuit filed against the bank in front of the Supreme Court next term. The lawsuit claims that the bank broke federal law by failing to notify clients of increasing interest rates on credit cards.
The bank is asking the high court to overturn a 2006 class-action lawsuit against the firm. James McCoy, the lead plaintiff in the case, has said the bank violated the Truth in Lending Act by retroactively increasing his payment cycle after his account was closed to new transactions due to a late payment.
Chase responded that federal law at the time of the interest hike did not mandate that banks notify cardholders of changes stemming from late payments. Furthermore, the bank claims that card member agreement allowed it to raise interest rates for cardholders in default.
The Federal Reserve Board amended the law last year, requiring banks to provide credit card users with prior notice of any rate increases due to default in advance.
Credit cards may seem useful when low on cash, but they can lead to crippling debt and major consequences. MSNBC advises those with large amounts of debt to use all extra cash to pay off the owed amount.