Skip to Content
The 190th General Court of the Commonwealth of Massachusetts

Section 27: Revolving credit agreement; form and contents

Section 27. A. Every revolving credit agreement shall contain the following notice appearing conspicuously directly above the space reserved in the agreement for the signature of the buyer: Notice of Buyer:

(1) Do not sign this agreement if any of the spaces intended for the agreed terms are left blank.

(2) You are entitled to a copy of this agreement at the time you sign it.

(3) You may at any time pay off the full unpaid balance under this agreement.

(4) You may under certain circumstances redeem the property, if repossessed because of your default, and you may, under certain conditions, require a resale of the property if repossessed.

(5) The seller has no right to unlawfully enter your premises or commit any breach of the peace to repossess goods purchased under this agreement.

(6) You may cancel a purchase under this agreement if it has been signed by a party thereto at a place other than the address of the seller which may be his main office or branch thereof; provided you notify the seller in writing at his main office or branch, by ordinary mail posted, by telegram sent or by delivery, not later than midnight of the third business day following a purchase under this agreement.

If the seller does not take a security interest in goods purchased pursuant to the revolving credit agreement, clauses (4) and (5) need not be included in the notice, and if the agreement was not signed by the buyer at a place other than the address of the seller, which may be his main office or any branch thereof, one of which must be shown on the agreement, clause (6) need not be included in the notice.

B. (1) An installment seller or holder thereof under a revolving credit agreement may assess a finance charge upon the installment buyer which shall not exceed one and one-half per cent per month computed upon the outstanding unpaid balance thereunder from month to month, which need not be a calendar month, or other regular period. The outstanding unpaid balance shall be determined consistent with clause (3). If the amount of any finance charge is less than fifty cents for any month, fifty cents may be assessed, provided that no finance is assessed for a zero balance. An installment seller or a holder of a revolving credit agreement may, pursuant to such agreement, charge, receive and collect a delinquency charge on any payment not paid in full within fifteen days of its due date in an amount equal to ten percent of the outstanding balance or ten dollars, whichever is less; provided, however, that no such delinquency charge shall be charged, received or collected unless said installment seller or holder, at least thirty days prior thereto, shall have mailed a notice informing its installment buyers of the change in terms of such agreement providing for the charging, receiving and collecting of such delinquency charge and disclosing the amount of such delinquency charge that may be imposed under said agreement.

(2) Finance charges may be computed under revolving credit agreements within a range of not in excess of ten dollars on the basis of the median amount within the selected range, provided that such finance charge is applied to all unpaid balances within such range.

(3) (a) In the event that a finance charge is imposed, it shall be computed upon (i) the previous balance after all payments on account, returns and other credits made or given during the billing cycle shall have been first deducted; provided, however, that returns and other credits may be deducted only to the extent that the purchase to which the credit or return relates has been reflected in the previous balance; or (ii) the average daily balance determined by adding the daily balances on the account for each day in the billing cycle, and dividing this total by the number of days in the billing cycle. Any such delinquency charge shall not be included in the computation of said finance charge.

[There is no subclause (b).]