What is a credit card arbitration clause?

A credit card arbitration clause is a legal agreement between a cardholder and a credit card company that requires the cardholder to take disputes to arbitration instead of court. This clause is often found in the fine print of credit card agreements. In Minnesota, when a credit card holder has a dispute with the credit card company, arbitration can be used to resolve the dispute. Arbitration is an alternative to litigation, where two parties agree to have the dispute heard and settled in an informal setting with a third party. This third party, called an arbitrator, hears from both parties and makes a decision. The decision of the arbitrator is legally binding and must be followed. The credit card arbitration clause requires both the cardholder and the card issuer to enter into binding arbitration in order to resolve disputes. This clause usually states that the arbitrator has full authority to decide the dispute, including the issue of damages. It also often includes a provision that the credit card company will cover the costs of arbitration, including legal fees. Credit card arbitration clauses help to streamline the dispute resolution process and reduce the time and cost associated with litigation. They also ensure a fair process that is less expensive than going through the court system. However, the cardholder should carefully consider the terms of the arbitration clause before signing the agreement. It is important to understand the rights and obligations of all parties involved.

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What is a credit card arbitration clause?

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