Do Credit Card Statements Prove a Written Contract?

A credit card statement is typically more of an enforcement of a contract than the contract itself. When you apply for and receive a new credit card, the provider sends you a cardholder agreement. This document outlines various terms and conditions of the account, such as interest rates, grace periods and other fees.

The primary purpose of your monthly statement is to enforce your obligation to make payments in line with your cardholder agreement. The statement commonly includes a minimum payment and payment due date. Most providers include a statement indicating that a late fee and interest rate hike are possible if you fail to make the minimum payment on time. This inclusion proves a diligent effort on the part of the card company to warn you of delinquency consequences.

Legal website Nolo notes that when a credit card company sues you to collect on a delinquent account, it must provide proof of your obligation. Courts typically require the original cardholder agreement as the proof, or contractual arrangement. Statements may lend support to ongoing communication related to late fees and extra interest charges because of late payments. Ideally, the cardholder agreement is signed, though the prevalence of online card applications means this ideal isn't always the case.

The rules are a bit different if a third-party collections agency buys your debt from the original creditor. The third-party agency must show proof that it owns the debt, and therefore has the right to sue to collect it. A transfer of ownership, bill of sale or receipt could all potentially qualify as proof of that right. Without proof, you could possibly get the case dismissed.

You actually have rights to damages if a collections company doesn't abide by a couple of its legal requirements. If you send a request to the agency for proof of the debt, the agency must provide such proof before contacting you again about it. If it fails to do so, or if it takes you to court and fails to meet its burden of proof, you could sue for punitive damages.