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Define an open ended account please.


Jason
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Define an open ended account please. In reguards to SOL. Thank you. Did a search nothing showed up.

I would assume a credit card would be an example of open ended as there is no expiration date and you use the card indefinately unless you cancel or don't pay. On the other hand something with a deadline such as a 3 year car lease, a 30 year mortgage or a loan payable with a term of say 5 years would not be considered open ended as they have a definitive closing date. JMHO

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The term open-ended account is defined by the UCC.

Normally, the difference is identified as:

Written: A specific amount borrowed for a specific period of time at a specific interest rate with consistent payments.

Open-ended: A limit that can be used by the consumer, the payment amount varies as the balance varies and interest rate may change (with notification).

There have been inconsistent results in state court as to whether or not a revolving CC is a written contract or not. Some states see a "contract" that was "signed" by the consumer and call it a written contract. Some states have determined that CCs do not fit the definition of a written contract because of the variables.

You need to check your own state to determine how it is viewed there.

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