You might be lucky enough to have someone in your life to help you read through security agreements from your credit card company, financial banking institutions and even online privacy policies, but there is a good chance that your assistant won’t understand everything either. Luckily, we have crafted a short article to help you understand the documents that you receive. Hopefully, you will leave this page feeling more confident to handle the security agreements that are sent your way.
The Trouble With Reading Financial Documents
Looking through documents from your financial institution is something that you might not want to face. However, the process doesn’t have to be boring. If you are willing to do a little research in understanding the language used in documents from your credit card company and bank compliance documents, you might find that you enjoy reading through such language. If you’re clicking onto the next page without reading through documents from your credit card company, then you might be missing out on important information that you should be reading.
Reading Financial Documents Doesn’t Have to Be Boring
In addition to needing to read the documents for your own benefit, actually taking time to look through them will alleviate some of the stresses that are lurking within your subconscious mind. Avoiding reading and understanding the documents that you are agreeing to is an ignorant act that will result in creating stress in your life. Even if you don’t realize it, the act of agreeing to something without reading through it creates anxiety that will take a toll upon the rest of your life.
The average consumer skips through reading financial and security agreements both in snail mail and while online. With a quick click of the ‘accept’ button we sign our security away without carefully reading what we have just accepted.
Funds Acquired After Security Agreements
Many credit card companies and credit unions will send consensual security agreements to their members in order to offset specific regulations (discussed below). Offsetting these regulations allows the financial institution the ability to collect funds from your deposit account. If you miss paying your credit card statement on time, the financial institution will have covered their losses by implementing your consensual security agreement.
In addition to using the funds from your deposit account to cover delinquent payments, all of the money that is in your account is accessible. In the scenario that you miss a payment, the financial institution may use any of the funds that you add to your account after signing the agreement. This is a simple matter that many people overlook, assuming that the only funds that the financial institution has access to are those that were in the account when the agreement was originally signed. Understanding these technicalities will help you remain confident about the ways in which you control your finances.
When you sign a consensual agreement with a company, no matter which market segment it is in, you need to be aware of a number of regulations, such as Regulation Z. According to 12 C.F.R. § 1026.12(d)(1), your credit card company doesn’t have the right to take money from the account that you have connected to deposit funds into your credit card account. It’s against regulation to take funds from a customer’s account when their account is past due. Even if you miss your credit card payment, Regulation Z helps make sure that your deposit account remains unaffected by such delinquency. Hopefully, you will make your payments on time, but this regulation will keep your other accounts from being slammed by late fees.
Now that you understand the safeguard that’s in place to protect your account, you need to be aware of the consensual security agreements that could offset this regulation. The credit card company may wish to offset Regulation Z, but they must obtain a signature or initials from you.