(a) Termination by a cardholder of an account is effective on the second business day (as to the card issuer) following delivery to the issuer of the notice of termination or on such later date as is specified in the notice. From and after termination, no cardholder or card user may initiate transactions under the account, and each cardholder, other than the terminating cardholder, and each card user shall surrender all cards in that person‘s possession or control to the issuer immediately upon receiving a copy of the notice of termination.

Terms Used In Tennessee Code 47-22-204

  • Account: means the account between a card issuer and one (1) or more cardholders reflecting the outstanding balance of card transactions. See Tennessee Code 47-22-201
  • Account agreement: means the contract between the card issuer and the cardholder(s) governing the parties' respective rights and obligations respecting the account and transactions effected thereunder. See Tennessee Code 47-22-201
  • card: means any card, plate, coupon book or other single credit device that is issued primarily for consumer credit purposes and that may be used from time to time to obtain credit, including, but not limited to, a card that may be used to effect transactions governed by chapter 11 of this title. See Tennessee Code 47-22-201
  • Card user: means any person authorized by the card issuer and all cardholders on an account to use a card pertaining to the account, but who is not obligated on the account of the issuer. See Tennessee Code 47-22-201
  • Cardholder: means a natural person residing in Tennessee who has agreed with a card issuer to pay debts arising from card transactions, whether the card used in such transactions has been issued to the cardholder or to another person. See Tennessee Code 47-22-201
  • issuer: means a person doing business in Tennessee that issues a credit card or that person's agent or assignee with respect to the card. See Tennessee Code 47-22-201
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Person: includes a corporation, firm, company or association. See Tennessee Code 1-3-105
  • transaction: means a cash advance, purchase, or other extension of credit effected or obtained by means of a credit card or account number. See Tennessee Code 47-22-201
(b) Termination of an account relieves the issuer of any obligation to extend credit in a card transaction under the account regardless of when the transaction is initiated and, except as provided in subsection (c), relieves each cardholder of any further liability respecting the account.
(c) Notwithstanding termination, each cardholder is liable for:

(1) All transactions initiated by any cardholder or card user prior to the effective date of termination;
(2) All transactions initiated at any time by or with the authorization of the cardholder against whom the issuer asserts liability, but no cardholder other than the initiating or authorizing cardholder shall be liable for such transaction; and
(3) All transactions initiated by any card user at any time.
(d) The account agreement shall remain applicable to any transaction initiated on or after the termination date for which a cardholder is liable, except that the outstanding balance of all such transactions shall, unless the issuer elects otherwise, be due and payable in full.
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