Message-ID: <23935034.1075840345575.JavaMail.evans@thyme> Date: Fri, 13 Jul 2001 21:00:20 -0700 (PDT) From: accountinformation@community.nextcard.com To: don.baughman@enron.com Subject: Important Notice Regarding Your NextCard Account Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: "accountinformation" @ENRON X-To: Baughman Jr., Don X-cc: X-bcc: X-Folder: \ExMerge - Baughman Jr., Don\Personal\Internet X-Origin: BAUGHMAN-D X-FileName: don baughman 6-25-02.PST The Changes described below in your Account Agreement will apply to any existing balances as well as new Purchases, Cash Advances and Balance Transfers and become effective with your Billing Cycle that ends on or after 8/1/01. These terms and conditions will be in effect as long as your Account has a balance. General This NextCard(R) Account Agreement and Disclosure Statement ("Agreement") contains the terms and conditions which govern your NextCard Visa(R) (or MasterCard(R)) Account ("Account") which is issued by NextBank, N.A., Phoenix, AZ. This Agreement includes this document and the terms provided in the Supplemental Disclosure enclosed with this document and the card carrier accompanying your Card, and any amendments thereto. The Supplemental Disclosure includes your Account Annual Percentage Rates. Please read this Agreement carefully, including the section on Finance Charges, and keep it for your records. In this Agreement, the word "Card" means the credit card(s) issued to you. The words "you," "your" and "yours" refer to each person who has been approved for this Account. The words "we," "our" or "us" refer to NextBank, N.A., or its assignees. In addition, the words "Transaction Date" refer to the date the goods or services were purchased or the date the Cash Advance was made. The words "Posting Date" refer to the date that the charge was debited and/or credited to your Account. By applying for this Account, you agree to the terms and conditions provided in this Agreement, including the Supplemental Disclosure. You agree to sign your Card as soon as you receive it. Liability You become bound by this Agreement when you use your Card or Account. You are also bound by this Agreement for the use of your Card or Account number by any person who has been given authority by you to use your Card or Account number. If you authorize another person to use your Card, such authority will extend until such time as we have retrieved the Card or you have received the Card back. Using Your Card and Account You may use your Card to purchase goods or services wherever your Card is honored; you may also use your Account to initiate the transfer of balances from other credit cards to your Account. NextCard reserves the right, however, to refuse transactions initiated by other credit card issuers or merchants at our discretion. You may obtain Cash Advances on your Card from financial institutions and automated teller machines that accept your Card. In addition, you may use Convenience Checks that we may provide to you from time to time. These checks may not be used to make payments on this or any other account with us. Your Card and Account may only be used for valid and lawful purposes. You may use your Account for Balance Transfers, by which you pay off other credit card outstanding balances. Balance Transfers may include initial and promotional offers. We have no responsibility for any refusal to honor your Card or the Convenience Checks we provide, nor for the retention of your Card by any financial institution or merchant. Promise to Pay You promise to pay the total amount of the Purchases, Cash Advances and Balance Transfers made with your Card or Account. You also promise to pay any Finance Charges or other charges described herein; and any costs incurred by us in enforcing this Agreement, including reasonable attorneys' fees and court costs. "Attorneys' fees" includes the cost to us of the services of our in-house counsel. If you close your account, you must notify us in writing and must still pay all amounts you owe us and will be responsible for any charges that you authorized prior to closing your account. If there is a membership fee for your account, the fee will continue to be charged, as permitted by law, until the account balance has been paid in full. Personal Identification Number After your Account is opened, we may issue you a Personal Identification Number ("PIN") which you may use with your Card to obtain Cash Advances on your Account at any automated teller machine in any system or network of which we are a member, or to make purchases at any designated point of sale machine. You may use your Card and PIN at an automated teller machine to obtain Cash Advances of up to $300 per day, up to your available Credit Limit for Cash Advances. There will be no charge for the issuance of a PIN. (Other banks' automated teller machines may have lower Cash Advance limits or may assess surcharges.) Statements You can access your Account information and Statements online. In addition, we will send or deliver to you a Statement at the end of each billing period (intervals of approximately one month called "Billing Cycles") if there is a debit or credit balance on your Account of $1 or more, or a balance on which a Finance Charge has been assessed. Upon your request or approval, we may deliver your statement electronically. Payment All payments must be made in U.S. Dollars and delivered, or mailed to us at the address shown on your Statement. Payments by check must be drawn on a U.S. bank. Due to processing requirements, any payment we receive after 11:00 a.m. Pacific Time will be considered received the following business day. You must pay at least the Minimum Payment Due shown on your Statement by the Payment Due Date - approximately 20 to 25 days after the Statement Closing Date - to avoid delinquency. If your payment is more than the Minimum Payment Due, it will be treated as a single payment and none of it will be applied to future Minimum Payments Due. We may apply payments to amounts owing on your Account at our sole discretion and are not required to do so in a manner that reduces the Finance Charges you must pay. Payments may also be made via the NextCard online bill payment system. For details on using the NextCard online bill payment feature, please go to My.NextCard.com. For information regarding your Minimum Payment Due each month, see the Supplemental Disclosure to this Account Agreement. Credit Limit The total amount of Cash Advances (including drafts, if available, withdrawals from ATMs, originations from the Card itself, and cash-like transactions, including but not limited to, wire transfers, money orders, foreign currency, lottery tickets, funds used for wagers or gambling, and money transfers using certain internet payment systems, and this includes all transactions identified to us as having been made by a merchant or service provider in such categories) you can receive at any time is shown on your monthly statements and is designated as your "Total Credit Limit for Cash Advances". You agree not to permit your unpaid Cash Advance balance to exceed this limit. If you currently exceed, or once you reach this limit, you will not be eligible for additional Cash Advances until your unpaid Cash Advance balance is below this limit. At this time, you may access the amount of the difference between your unpaid Cash Advance balance and your Cash Advance Credit Limit. We may change your Cash Advance Credit Limit at any time, and we will notify you of any such change. We reserve the right to delay increasing your available credit for up to 14 days if we consider it necessary to verify payments received on your Account. This change will not affect how promptly payments are posted to your Account for purposes of determining Finance Charges, late fees or delinquency. FINANCE CHARGES The types of Finance Charges that may be assessed on your Account are as follows: Periodic Finance Charges; Transaction Finance Charges; Annual Membership Fee Finance Charges; Rewards Fee Finance Charges; and PictureCard Fee Finance Charges. Your total Finance Charge each Billing Cycle is the sum of each type of Finance Charges. We calculate Periodic Finance Charges separately for Purchases, Cash Advances and Balance Transfers. To determine the Periodic Finance Charge, we apply the Daily Periodic Rates for Purchases, Cash Advances and Balance Transfers to the daily balance of Purchases, Cash Advances and Balance Transfers. The sum of these daily calculations for each day in the Billing Cycle is the total Periodic Finance Charge for the Billing Cycle. The Daily Periodic Rates for your Account are the corresponding Annual Percentage Rates that currently may apply divided by 365. To determine your daily balance of Purchases, Cash Advances and Balance Transfers we start with the outstanding balance at the beginning of the day including any Periodic Finance Charges calculated on the previous day's balance, add any new Purchases, Cash Advances and Balance Transfers or other debits for the day and then subtract any payments or credits applied to Purchases, Cash Advances and Balance Transfers that day. This gives us the separate daily balances for Purchases, Cash Advances and Balance Transfers. Purchases, Cash Advances and Balance Transfers are included in your daily balances as of either the transaction date or the beginning of the Billing Cycle in which they are posted to your Account, whichever is later. Periodic Finance Charges for Purchases, Cash Advances and Balance Transfers for a day are added to the daily balances of Purchases, Cash Advances and Balance Transfers at the end of the day and included in the beginning balances for the next day. Other Charges, Annual Membership Fee Finance Charges, Rewards Fee Finance Charges and PictureCard Fee Finance Charges are added to the daily balance of Purchases when posted. Transaction Finance Charges are added to the daily balance of Cash Advances when posted. For each Cash Advance transaction, including but not limited to, each Cash Advance obtained through a financial institution or ATM, or each cash-like transaction, such as the purchase of wire transfers, money orders, travelers checks, lottery tickets, funds used for wagers or gambling, and money transfers using internet payment systems, and this includes all transactions identified to us as having been made by a merchant or service provider in such categories, we may assess a Transaction Finance Charge equal to 3% of the amount of the advance, but not less than $5.00. A Transaction Finance Charge is included in the calculation of the Annual Percentage Rate shown on your Statement; therefore, for any Billing Cycle in which you have drawn a Cash Advance or used a Convenience Check, the Annual Percentage Rate that will appear on your Statement may be higher than the Annual Percentage Rate described in the disclosures provided to you. NextCard offers optional Rewards Programs and an optional PictureCardSM Program. Refer to the Supplemental Disclosure for details regarding these programs. In any Billing Cycle in which there is a Finance Charge, the minimum Finance Charge will be $1.00. Grace Period Purchases, Cash Advances and Balance Transfers accrue Periodic Finance Charges from the date they are included in your Daily Balance until paid. However, Periodic Finance Charges are not assessed in a Billing Cycle on Purchases if you paid in full the New Balance, if any, shown on your previous statement by the Payment Due Date shown on that statement or if that New Balance was a zero or credit balance. Other Charges Your Account also has the following other fees and charges ("Other Charges"): There may be an Annual Fee on your Account. Refer to the Supplemental Disclosure for details regarding the Annual Fee. Late Fee: We will add a fee in the amount shown in the Supplemental Disclosure to this Agreement to the balance on your Account for each Billing Cycle you fail to make the Minimum Payment Due by the Payment Due Date. Overlimit Fee: We will add a fee in the amount shown in the Supplemental Disclosure to this Agreement to the balance on your Account any time you exceed your Total Credit Limit during a Billing Cycle. Returned Payment Fee: You agree to pay $29.00 for each check, draft or automatic payment ("Payment Order") issued by you as a payment on your Account which fails to clear and is returned unsatisfied by your financial institution. We may post this charge to your Account even if we re-present your Payment Order, and even if the Payment Order is paid upon re-presentment. Document Retrieval Fee: If a copy of any statement, sales draft or similar document is provided by us at your request (except in connection with a billing error inquiry or dispute), we may charge $5.00 for each document copy and a research fee of $15 per hour if extensive investigation is required. Authorized Users You may request and, at our discretion, we may provide an additional Card on this Account for use by an individual you authorize ("Authorized User"). You may also make a single request for a new Card ("Replacement Card") for you or an Authorized User on this Account. In addition, we may periodically send you substitute Card(s) for your use. Cards issued in any of these ways are not subject to service charges. However, if you have previously requested a single Replacement Card, we may charge a Card Replacement Fee of $15 for any additional Card(s) you request. Default and Immediate Payment You will be in default and we can require immediate payment of all amounts you owe if: you provide inaccurate or incomplete information when you apply for your Account or thereafter; you fail to make the Minimum Payment Due on your Account by the Payment Due Date; your balance amount exceeds your Credit Limit; your outstanding Cash Advance Balance exceeds your Cash Advance Credit Limit, if applicable; you fail to pay your other debts or obligations; you fail to abide by any term or condition of this Agreement; we believe, in good faith, that you may not be able to meet the obligations of this Agreement; or, upon your death. If you are in default or we have reason to doubt your creditworthiness (for example, you have a returned payment for any reason) we may, without notice or demand for payment, terminate your right to obtain any additional credit. You also agree to notify us promptly upon any change in name, address (including phone number), employer (including phone number), or email. Termination We may suspend or terminate your rights to obtain credit at any time for any reason. Your obligations under this Agreement will continue even after your rights to obtain credit have been suspended or terminated. Not Secured Credit Your Account is not secured credit. We have no security interest in any transaction you make with this Card, regardless of any other agreement you may have with us. Foreign Currencies Depending on whether your Card is a Visa or MasterCard, if you charge a transaction in a foreign currency, the transaction will be converted into a U.S. dollar amount by Visa or MasterCard based on their operating procedures and regulations. Generally, currency conversions are made using either a government-mandated rate or wholesale market rate in effect one day prior to the Processing Date, increased by an adjustment factor established from time to time by Visa or MasterCard. We increase this currency conversion rate by 2%. The currency conversion rate in effect on the Processing Date may differ from the rate in effect on the Transaction Date or the Posting Date. Additionally, for any Card transaction which occurs (regardless of where you initiate the transaction) in U.S. dollars outside the United States, we will add a fee of 2% of the amount of the transaction, but not less than $3.00. Unauthorized Use You must contact us immediately at 1-877-744-4417 (from overseas, you may call us at 1-918-497-1629) if your Card is lost or stolen or if you suspect unauthorized use of your Account. We may investigate any cases of unauthorized use of your Card or Account. If you report or we suspect unauthorized use of your Card or Account, we may suspend your credit privileges until we resolve the problem to our satisfaction or issue you a new Card. You agree to sign each Card upon receipt. You agree to safeguard the Card, your PIN, which provides access to automated teller machines, and Password, which provides Internet access, from theft. You agree to keep your PIN and Password confidential and separate from your Card. If an unauthorized transaction occurs on your Account or your Account number is obtained over the Internet and subsequently used for unauthorized transactions, you will not be liable for those transactions. If You Close Your Account You can close your Account by notifying us in writing at NextCard, P.O. Box 60610, Phoenix, AZ 85082-0610. If you close your Account, you must still pay all amounts you owe us and you will be responsible for any charges that you authorized. You must destroy all Cards and all Convenience Checks, cancel all preauthorized billing arrangements and cease using your Account. Refer to the Supplemental Disclosure for details regarding the Annual Percentage Rate on the remaining amount you owe. Updating Your Account Information From time to time, we may obtain updated credit information from a credit reporting agency. You are hereby notified that a negative credit report reflecting on your credit record may be submitted to a credit reporting agency if you fail to fulfill the terms of your credit obligation. If you believe we have reported inaccurate information about you to a credit bureau, please notify us at the address appearing on your statement. We may share information regarding our experiences or transactions with you or your Account with others, including merchants and companies affiliated with us by common control or ownership (our "Affiliates"). We may also share additional information regarding you or your Account (such as information from credit reporting agencies) with our Affiliates. You can request that we do not furnish to our Affiliates information that does not relate to our experiences or transactions with you or your Account by calling us at 1-888-974-2265. You can also request that we do not share information about you for marketing purposes with unaffiliated parties by contacting us at 1-888-974-2265. Amendments and Assignments After we provide you any notice required by law, we may change any part of this Agreement and add, remove or alter requirements. IF A CHANGE IS MADE TO THIS AGREEMENT, YOU AGREE THAT, FROM THE EFFECTIVE DATE OF THE CHANGE, THE NEW TERMS, INCLUDING ANY NEW OR INCREASED Finance Charges, WILL APPLY BOTH TO ANY NEW CHARGES TO YOUR ACCOUNT AND TO YOUR ENTIRE OUTSTANDING BALANCE, INCLUDING ITEMS POSTED TO YOUR ACCOUNT BEFORE THE EFFECTIVE DATE OF CHANGE. We also reserve the right to review your creditworthiness from time to time, including your performance with other creditors, and to change the terms of your Account based on that review. You agree that we may assign your Account and any amounts that you owe us to another entity or person at any time, with or without notice to you. Dispute Resolution IT IS IMPORTANT THAT YOU READ THIS ENTIRE SECTION CAREFULLY. THIS SECTION PROVIDES FOR RESOLUTION OF DISPUTES THROUGH FINAL AND BINDING ARBITRATION BEFORE A NEUTRAL ARBITRATOR INSTEAD OF IN A COURT BY A JUDGE OR JURY OR THROUGH A CLASS ACTION. The Dispute Resolution Provision will become effective for disputes which are not part of a lawsuit 45 calendar days after the Statement Date on the enclosed billing statement (the 65th day if you live in Iowa*, the 95th day if you live in Wisconsin, or the 130th day if you live in Texas), unless we receive prior to then a letter from you stating that you do not want the Dispute Resolution provision to become part of the Agreement. The letter must be addressed to NextCard, P.O. Box 60610, Phoenix, AZ 85082-0610. It must contain your name, address and your Account number. It must be signed by you. If we receive such a letter on time, the Dispute Resolution provision will not become part of the Agreement, and the status of your Account will be unaffected by your rejection of the Dispute Resolution provision. *SPECIAL NOTICE FOR IOWA RESIDENTS: The Dispute Resolution Provision will only become effective for disputes which are not part of a lawsuit if you use your Account at least sixty five(65)calendar days after the Statement Date on the enclosed billing statement." THE DISPUTE RESOLUTION PROVISION SET FORTH IN YOUR ACCOUNT AGREEMENT MAY SUBSTANTIALLY LIMIT OR AFFECT YOUR RIGHTS. PLEASE READ IT CAREFULLY AND KEEP IT FOR YOUR RECORDS. *SPECIAL NOTICE FOR IOWA RESIDENTS: The Dispute Resolution Provision will only become effective if you use your Account at least sixty five (65)calendar days after the Statement Date on the enclosed billing statement." BINDING ARBITRATION. Arbitration is a method of deciding disputes outside the court system. This Provision governs when and how any disputes you and we may have will be arbitrated instead of decided in court. The arbitration process established by this section is governed by the Federal Arbitration Act ("FAA") (9 U.S.C. Sections 1 and following). You have the right to take any dispute that qualifies to small claims court rather than to arbitration. All other disputes (whether based in contract, tort, statute, fraud, misrepresentation or any other legal or equitable theory) arising out of or related to this Agreement, including events leading up to you becoming an Account holder and disputes about whether this Provision is valid or binding or about whether or when the Provision applies and disputes about wrongful acts of every kind, must be resolved by final and binding arbitration. This includes any dispute based on any product, service, or advertising having a connection with this Agreement and any dispute not finally resolved by a small claims court. The arbitration will be conducted by one arbitrator using the procedures described in this Provision. The arbitration of any dispute involving $10,000 or less shall be conducted in accordance with the Consumer Arbitration Rules of the American Arbitration Association ("AAA"), as modified by this Agreement, which are in effect on the date a dispute is submitted to the AAA. The AAA's Commercial Arbitration Rules and fee schedules will apply to any disputes in excess of $10,000. The arbitrator shall not apply federal, state, or local rules of procedure and evidence or state or local laws concerning arbitration proceedings. The arbitrator must follow the FAA, the substantive law, statutes of limitations and claims of privilege recognized at law. You have the right to be represented by counsel in an arbitration. In making an award, the arbitrator shall be bound by and strictly enforce the terms of this Agreement and may not limit, expand, or otherwise modify its terms. The arbitrator shall be a lawyer with more than ten years experience or a retired or former judge. Our address for service of process under this Provision is NextCard, P.O. Box 60610, Phoenix, AZ 85082-0610. NO DISPUTE MAY BE JOINED WITH ANOTHER LAWSUIT, OR IN AN ARBITRATION WITH A DISPUTE OF ANY OTHER PERSON, OR RESOLVED ON A CLASS OR REPRESENTATIVE (SUCH AS A PRIVATE ATTORNEY GENERAL) BASIS. THE ARBITRATOR MAY NOT AWARD DAMAGES THAT ARE NOT EXPRESSLY AUTHORIZED BY THIS AGREEMENT AND MAY NOT AWARD PUNITIVE DAMAGES OR ATTORNEYS' FEES UNLESS SUCH DAMAGES ARE EXPRESSLY AUTHORIZED BY A STATUTE. YOU AND NEXTCARD BOTH WAIVE ANY CLAIMS FOR AN AWARD OF DAMAGES THAT ARE EXCLUDED UNDER THIS AGREEMENT. ARBITRATION PROCEDURES. Before you take disputes to arbitration or small claims court, you must first contact our customer account representatives at the number on your account statement or write to us at NextCard, P.O. Box 60610, Phoenix, AZ 85082-0610 and give us an opportunity to resolve the dispute. Similarly, before NextCard takes a dispute to arbitration, we must first attempt to resolve it by contacting you. If the dispute cannot be satisfactorily resolved within sixty days from the date you or NextCard is notified by the other of the dispute, then either party may contact the AAA in writing at 335 Madison Avenue, New York, NY 10017 and request arbitration of the dispute. Information about the arbitration process and the AAA's Arbitration Rules and its fees are available from the AAA on the internet at www.adr.org. The arbitration will be based only on the written submission of the parties and the documents submitted to the AAA relating to the dispute, unless either party requests that the arbitration be conducted using the AAA's telephonic, on-line or in-person procedures. Additional charges may apply for these procedures. Any in-person arbitration will be conducted at a location that the AAA selects in the state of your primary residence. A party who has asserted a dispute in a lawsuit may still elect arbitration for any part or all of the dispute that is asserted in the lawsuit. All doubts about whether to arbitrate all or any part of a dispute shall be resolved in favor of arbitration. The arbitrator shall apply applicable substantive law consistent with the FAA and provide written reasoned findings of fact and conclusions of law. The arbitrator's award shall not be subject to appeal except as permitted by the FAA. Judgment on the award may be entered in any court having jurisdiction. Any arbitration shall remain confidential. Neither you nor NextCard may disclose the existence, content, or results of any arbitration or award, except as may be required by law, or to confirm or enforce an award. ANY CLAIM OR DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT MUST BE BROUGHT WITHIN TWO YEARS AFTER THE DATE THE BASIS FOR THE CLAIM OR DISPUTE FIRST ARISES. FEES AND EXPENSES OF ARBITRATION. You must pay the applicable AAA filing fee when you submit your written request for arbitration to the AAA. The AAA's filing fee and administrative expenses for a document arbitration will be allocated according to the AAA's Rules. On any dispute you file, you will pay at least $50 of the filing fee. If you cannot afford to pay the fees charged by the AAA and the arbitrator or if you believe that such fees are too high, we will consider any reasonable written request by you to pay the fees. If you elect an arbitration process other than a document (or "desk") arbitration, you must pay your allocated share of any higher administrative fees and costs for the process you select. We will pay any fees or expenses we are required to pay by law. Each party must bear the expense of that party's attorneys, experts and witnesses, regardless of who wins the arbitration, except to the extent that applicable law or the AAA's Rules provide otherwise. The prevailing party, however, may seek to recover AAA's fees and the expenses of the arbitrator from the other party. MISCELLANEOUS. This arbitration Provision shall survive any suspension or termination of your Account, as well as the repayment of all amounts borrowed under this Agreement. If there is any conflict or inconsistency between this Provision and the AAA's Rules or other Provisions of this Agreement, this Provision will govern. If any portion of this Dispute Resolution is determined to be unenforceable, the remainder shall, nevertheless, remain enforceable. Governing Law This Agreement is governed by the laws of the State of Arizona and by any applicable federal laws no matter where you live. You agree that any litigation brought by you against us regarding this Account or this Agreement shall be brought in a state or federal court located in the State of Arizona. If any part of this Agreement is found to be invalid, the rest remains effective. General Information No delay or failure in enforcing our rights under this Agreement will prejudice any of our rights hereunder. If you default, unless prohibited by applicable law, we may require you to pay all collection costs, including reasonable attorneys' fees and court costs. Our failure to exercise any of our rights when you default or exercise other of our rights does not mean that we are unable to exercise those rights upon later default or otherwise. Payments Marked "Paid In Full" We may accept letters, checks or other types of payments showing "payment in full" or using other language to indicate satisfaction of your debt, without waiving any of our rights to receive full payment under this Agreement. Satisfaction of your debt for less than the full amount requires a written agreement, signed by one of our authorized employees. YOUR BILLING RIGHTS: KEEP THIS NOTICE FOR FUTURE USE This notice contains important information about your rights and our responsibilities under the Fair Credit Billing Act. Notify Us in Cases of Billing Errors or Questions about Your Statement. If you think your Statement is wrong, or you need more information about a transaction on your Statement, write us at: P.O. Box 62648, Phoenix, AZ 85082-9962 Write us as soon as possible. We must hear from you no later than 60 days after we sent you the first Statement on which the error or problem appeared. You can telephone us, but doing so will not preserve your rights. In your letter, give us the following information: *Your name and account number. *The dollar amount of the suspected error. *Describe the error and explain, if you can, why you believe there is an error. If you need more information, describe the item you are not sure about. If you have authorized us to pay your credit card bill automatically from your savings or checking account, you can stop the payment on any amount you think is wrong. To stop the payment your letter must reach us three business days before the automatic payment is scheduled to occur. Your Rights and Our Responsibilities after We Receive Your Written Notice. We must acknowledge your letter within 30 days, unless we have corrected the error by then. Within 90 days, we must either correct the error or explain why we believe your Statement was correct. After we receive your letter, we cannot try to collect any amount you question, or report you as delinquent. We can continue to bill you for the amount you question, including Finance Charges, and we can apply any unpaid amount against your Credit Limit. You do not have to pay any questioned amount while we are investigating, but you are still obligated to pay the parts of your Statement that are not in question. If we find that we made a mistake on your Statement, you will not have to pay any Finance Charges related to the questioned amount. If we did not make a mistake, you may have to pay Finance Charges, and you will have to make up any missed payments on the questioned amount. In either case, we will send you a statement of the amount you owe and the date that it is due. If you fail to pay the amount that we think you owe, we may report you as delinquent. However, if our explanation does not satisfy you and you write to us within ten days telling us that you still refuse to pay, we must tell anyone we report you to that you have a question about your Statement. And, we must tell you the name of anyone we reported you to. We must tell anyone we report you to that the matter has been settled between us when it finally is. If we do not follow these rules, we cannot collect the first $50 of the questioned amount, even if your Statement was correct. Special Rule for Credit Card Purchases. If you have a problem with the quality of property or services that you purchased with your Card, and you have tried in good faith to correct the problem with the merchant, you may have the right not to pay the remaining amount due on the property or services. There are two limitations on this right: *You must have made the purchase in your home state or, if not within your home state, within 100 miles of your current mailing address; and *The purchase price must have been more than $50. These limitations do not apply if we own or operate the merchant, or if we mailed you the advertisement for the property or services. Important Notice Regarding Your NextCard Account Effective with your Billing Cycle dated after August 15, 2001, your NextCard Account Agreement is being amended to include the following changes to your Terms and Conditions outlined below. The Annual Percentage Rate for Purchases and Balance Transfers is a variable rate equal to the Prime Rate plus a margin of 15.99%, but in any event, not less than 22.99% (Daily Periodic Rate of 0.06298%), or Prime Rate plus a margin of 16.99% for Delinquent Accounts, but in any event, not less than 23.99% (Daily Periodic Rate of 0.06573%), Prime Rate plus a margin of 20.99% for Derogatory Accounts, but in any event, not less than 27.99% (Daily Periodic Rate of 0.07668%), and a fixed rate of 29.99% (Daily Periodic Rate of 0.08216%) for Seriously Delinquent Accounts. The APR for Purchases and Balance Transfers after you close your Account is variable rate equal to the maximum of Prime Rate plus a margin of 12.99% or your Annual Percentage Rate for Purchases and Balance Transfer, but in any event, not less than 19.99% (Daily Periodic Rate of 0.05476%). For a "Cured" Account, the APR for Purchases and Balance Transfers is a variable rate equal to the Prime Rate plus a margin of 15.99%, but in any event, not less than 22.99% (Daily Periodic Rate of 0.06298%). These variable rates were in effect on June 1, 2001. The Annual Percentage Rate for Cash Advance is a variable rate equal to the maximum of the Prime Rate plus a margin of 17.99% or your Annual Percentage Rate for Purchases and Balance Transfer, but in any event, not less than 24.99% (Daily Periodic Rate of 0.06846%). In this Supplemental Disclosure Statement the term "Prime Rate", as used for any Billing Cycle, is the highest Prime Rate published in the Money Rate Tables of The Wall Street Journal (Western Edition) on the first business day of the calendar month in which the Billing Cycle ends. Changes in the Prime Rate will take effect on the first day of your Billing Cycle. If the Prime Rate increases, so will the Daily Periodic Rate, your Periodic Finance Charges, and your Annual Percentage Rate. If more than one Prime Rate is published, the highest Prime Rate will be used for this calculation. If The Wall Street Journal (Western Edition) fails to publish the Prime Rate for the relevant date, we will use the Prime Rate published in The New York Times or any other newspaper of national circulation selected by us. The Prime Rate is merely a reference rate and may not be the lowest rate available. The Daily Periodic Rates used in determining Finance Charges and corresponding APR may change each month as the Prime Rate changes. Any increase or decrease in your Daily Periodic Rates will apply to both the outstanding balance of your Account and new charges. The Daily Periodic Rates will continue to vary even if your Account is closed. The Daily Periodic Rate is the APR divided by 365. Your Account is Delinquent if payment is received late or is returned or the Account is overlimit; Derogatory if, in any 12-month period, the Account is Delinquent twice; and Seriously Delinquent if you fail to make at least the Minimum Payment Due for two consecutive Billing Cycles. Accounts are no longer Derogatory or Delinquent if no late or returned payment occurs and the Account is not overlimit for 12 consecutive months (a "Cured Account"). Minimum Payment The Minimum Payment Due for each Billing Cycle will normally be: 2% of the Balance shown on your statement (or may be higher to ensure that it is sufficient to pay the Finance Charges) plus the amount of any Past Due Amount and the amount by which the Balance exceeds your credit limit. This payment will not be less than $15 or your total Balance. These changes apply to outstanding balances for Purchases and Balance Transfers on the effective date and new transactions. If you have questions please email us at accountinformation@nextcard.com or call us at 1-877-704-0273, between the hours of 8 A.M. and 5 P.M. PST Monday-Friday. Thank You. Sincerely, NextCard Cardholder Services www.nextcard.com NextCard, Inc.