Consumer Credit Laws in Texas

According to a 2010 article from MSN Money, How Does Your Debt Compare?, Americans spend 43 percent more than they actually earn and carry at least $1,000 in credit card debt on average. In Texas, the Office of Consumer Credit Commissioner (OCCC) regulates credit card practices and provides information to citizens on consumer credit.

Usury Laws

Usury is defined as excessive interest rates for loans and credit card instruments charged by a financial institution. Each state regulates lending and credit card interest rates. The Texas Attorney General reports that interest rates for commercial loans have been set at 18 percent annually, but can fluctuate and extend as high as 24 percent in some cases. Interest rates for automobiles have a maximum yearly rate of 27 percent, and pawn shops can charge clients upwards of 240 percent annually. According to UsuryLaw.com, personal loans and credit card transactions for consumers usually remain at 6 percent for Texas residents; however, interest rates tend to vary over time due to inflation.

Credit Cards

Texas law limits how much interest a bank can charge that has been chartered to do business in the state. Texas requires all credit card businesses to protect consumers by hiding the last four digits of credit card numbers on all credit/debit card receipts. In addition, businesses in Texas do not have the authority to penalize consumers for actual credit card usage.

Debt Collection

Laws pertaining to debt collection under the Texas Finance Code protect residents from unfair and illegal credit card collection practices. Debt collection practices that violate the Texas Finance Code include: threatening to file charges or take criminal action against a consumer when there has been no violation of criminal law, or accusing a consumer of fraud or some unsubstantiated crime. In addition, credit card collectors in Texas cannot harass or abuse consumers by using threatening language or making inappropriate phone calls. Accordingly, Texas law prevents debt collectors from calling consumers before 8 a.m. or after 9 p.m. Consumers with outstanding debt that passes a state's statute of limitations may not have to repay the debt; however, statutes differ among the states. In Texas, the statute of limitations for debt contracts (i.e., oral and written contracts and promissory notes) is four years.