Title 15, Commerce and TradeRelease 119-110

§1666i Assertion by Cardholder Against Card Issuer of Claims and Defenses Arising Out of Credit Card Transaction; Prerequisites; Limitation on Amount of Claims or Defenses

Title 15 › CHAPTER 41 — CONSUMER CREDIT PROTECTION › SUBCHAPTER I — CONSUMER CREDIT COST DISCLOSURE › Part D — Credit Billing › § 1666i

Last updated Sep 22, 2026|Official source

Summary

Card issuers must handle most disputes a cardholder has about a purchase made with the card, except for injury lawsuits. This applies if the cardholder first tried in good faith to resolve the problem with the seller, the purchase was more than $50, and the sale happened in the same state as the cardholder’s mailing address or within 100 miles. The $50 and 100-mile limits do not apply when the seller is the issuer or is closely linked to the issuer (controlled by, under common control, a franchised dealer, or sold after a mail solicitation by the issuer). The amount the cardholder can claim or use as a defense cannot exceed the credit owed for that purchase when they first notify the issuer or seller. Payments and credits are applied first to late fees, then to finance charges, then to other charges, in the order they were posted.

Full Legal Text

Title 15, §1666i

Commerce and Trade, Source: USLM XML via OLRC

(a)Claims and defenses assertible

Subject to the limitation contained in subsection (b), a card issuer who has issued a credit card to a cardholder pursuant to an open end consumer credit plan shall be subject to all claims (other than tort claims) and defenses arising out of any transaction in which the credit card is used as a method of payment or extension of credit if (1) the obligor has made a good faith attempt to obtain satisfactory resolution of a disagreement or problem relative to the transaction from the person honoring the credit card; (2) the amount of the initial transaction exceeds $50; and (3) the place where the initial transaction occurred was in the same State as the mailing address previously provided by the cardholder or was within 100 miles from such address, except that the limitations set forth in clauses (2) and (3) with respect to an obligor’s right to assert claims and defenses against a card issuer shall not be applicable to any transaction in which the person honoring the credit card (A) is the same person as the card issuer, (B) is controlled by the card issuer, (C) is under direct or indirect common control with the card issuer, (D) is a franchised dealer in the card issuer’s products or services, or (E) has obtained the order for such transaction through a mail solicitation made by or participated in by the card issuer in which the cardholder is solicited to enter into such transaction by using the credit card issued by the card issuer.

(b)Amount of claims and defenses assertible

The amount of claims or defenses asserted by the cardholder may not exceed the amount of credit outstanding with respect to such transaction at the time the cardholder first notifies the card issuer or the person honoring the credit card of such claim or defense. For the purpose of determining the amount of credit outstanding in the preceding sentence, payments and credits to the cardholder’s account are deemed to have been applied, in the order indicated, to the payment of: (1) late charges in the order of their entry to the account; (2) finance charges in order of their entry to the account; and (3) debits to the account other than those set forth above, in the order in which each debit entry to the account was made.

Reference

Citations & Metadata

Citation

15 U.S.C. § 1666i

Title 15, Commerce and Trade

Last Updated

Sep 22, 2026

Release point: 119-110