brand brand
Helping good people through bad times
423-954-7180
423-954-7180

Can credit card companies arbitrarily change interest rates?

It may seem as though the interest rates that Tennessee residents pay on their credit cards are all different and always changing. While there is some variation and volatility in these matters, credit card companies are not allowed to make unannounced or surprise modifications to the rates they charge. This post will address this topic in more depth but, as with all debt and bankruptcy matters, readers are reminded to always seek their own legal advice so that they can best manage their own legal needs.

Under the CARD Act, credit card companies must provide their borrowers with notice of interest rate changes. Those notices must be provided at least 45 days in advance of the implementation of those changes, and may also apply to changes in how the credit card company will assess and collect certain fees. The notice period is intended to give individuals time to decide what they want to do.

When a credit card holder is notified that their card's rate will be changing, they have options. They can choose to keep their card and accept the new terms that their lender has implemented. They may also be given the opportunity to cancel their credit card so that they are not subjected to the increase to their interest rate.

While the CARD Act cannot impose restrictions on how much credit card companies change their rates, it can limit just how quickly they put those changes in to effect. When a credit card holder's rate jumps, they may experience a significant financial burden when their balance is subjected to that new rate. Different options may be available to individuals who are struggling under the burden of credit card debt.

No Comments

Leave a comment
Comment Information

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

Phone: 423-624-4002
Toll Free: 800-257-7594
Fax: 423-624-0509
Chattanooga Law Office Map