Supreme Court rules in favor of arbitration in credit card case

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Updated: January 10, 2012 9:44AM

WASHINGTON — The Supreme Court has decided that disputes between consumers and companies that issue low-rate credit cards to people with bad credit ratings must be handled in business-friendly arbitration, rather than federal court.

The justices voted 8-1 Tuesday to reverse a federal appeals court ruling allowing consumers to sue in federal court. The consumers said they were promised an initial $300 in available credit, but were charged $257 in fees in the first year they had the credit card.

But the court, with only Justice Ruth Bader Ginsburg dissenting, agreed with the companies’ argument that the dispute must be settled through arbitration, under an agreement that the customers signed to receive the card.

The case is CompuCredit Corp. v. Greenwood, 10-948.