Arizona Court of Appeals Division One holds that a claim for the entire unpaid balance of a credit card is not triggered until the lender demands payment in full on the account.

Cardholders accrued several thousand dollars in debt on their credit card.  In 2007, they missed their first monthly payment on the card, and paid only sporadically after that.  In 2008, the credit card company closed the account with an outstanding balance and sold the debt to a collection agency.  The collection agency sued the cardholders for breach of contract in 2014.  The trial court granted the cardholders’ motion for summary judgment, holding that the 2014 action was barred by the six-year statute of limitations because the claim first accrued in 2007 when the cardholders first breached the contract by failing to make a monthly payment.  The collection agency appealed.

The Court of Appeals reversed.  It held that a claim for the minimum monthly payment accrued when a cardholder fails to make that payment, but that a claim for the full outstanding balance of the credit card did not accrue until the company accelerated the debt or otherwise demanded payment in full.  The Court reasoned that a claim accrues, and the statute of limitations begins to run, only when one party is able to file suit against another.  According to the contract, the credit card company was unable to sue the cardholders for the entire outstanding balance on the account until it first made a demand for payment of that amount. 

Judge Johnsen delivered the unanimous opinion, in which Judges Downie and Beene concurred