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Limits to credit card interest rates

Many Tennessee residents find themselves closely evaluating their financial situation at the beginning of each year. Once the holidays are over and the bills start piling in, many people realize just how difficult their financial situation has become. For many individuals, credit card debt is the main culprit in their financial issues. Many people are stuck in a cycle of debt where they can only afford minimum payments. As a result, interest continues to accumulate on accounts. When payments are made, they don't even begin to touch the principle of the balances.

For individuals in these situations, it can be difficult to imagine how to climb out of the financial hole they are living in. Oftentimes, interest rates are developed in such a way to keep people locked in the cycle of debt.

In some cases, there are limits to the amount of interest that a credit card company can charge. On a state level, usury laws may limit the amount of interest that lenders can charge on particular debts. However, usury laws have fallen out of fashion and have little force in many jurisdictions across the United States.

In addition to usury laws, the Credit Card Accountability, Responsibility and Disclosure Act of 2009 may limit the amount of interest that a credit card company can charge. While the "CARD" Act does not specifically limit the amount of interest that a credit card company can charge, it does limit when card companies are able to change the interest rate. Under the CARD act, companies must provide individuals with at least 45 days of notice before charging certain fees, increasing interest rates or making others significant changes to the terms of a credit card.

Without significant limitations on the amount of interest that a person may be charged on a credit card, debt can accumulate quickly. For many Tennessee residents, turning to financial relief strategies will be there only way out of debt. In many cases, filing for bankruptcy can be a person's best way to get the financial fresh start that they need.

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Kenneth C. Rannick, P.C.
4416 Brainerd Road
Chattanooga, TN 37411

Phone: 423-624-4002
Toll Free: 800-257-7594
Fax: 423-624-0509
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