Every credit card that a Tennessee resident applies for and uses to make purchases comes with an interest rate. That interest rate is applied to the balance that a consumer carries on their card if they do not pay off their purchases in full at the end of each billing period. While many people are aware that these interest rates can increase the amount of money they are liable to pay off when their balances are carried over, not everyone is aware that their credit card interest rates can change.

One way that a credit card interest rate can change is if the person acquired their card with a promotional interest rate. For example, some credit card companies may offer a 0 percent rate for the first year of a person’s card use and then automatically increase it once the first year is over. Consumers must be told that the promotional rate is not permanent and must be made aware of what the new rate will be.

Also, credit card interest rates can change when consumers fail to keep up with their monthly payments. A consumer who fails to make timely payments may be considered a risk to a credit card company, and as such that individual may be subjected to a higher interest rate to help the credit card company recoup the money it has lent the consumer through the card.

There are a number of other ways and reasons that a person’s credit card interest rate may change. It is important for consumers to be aware of these potentially costly increases because changes in interest rates can mean larger fees for individuals who are struggling to pay down their credit card bills. For those who cannot find relief from their credit card debt, help is available. Bankruptcy and other debt relief options may help consumers find strong financial footing.

Source: money.cnn.com, “What you don’t know about your credit card interest rates,” Anna Bahney, Feb. 27, 2018