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Can credit card companies raise APRs?

A credit card can be an important tool in a Tennessee resident's financial plan. While cash can be used to make some small and moderately-sized purchases, it is often the case that individuals use their credit cards to make larger purchases so that they do not have to carry around excessive amounts of money. Also, credit cards help consumers facilitate online buying since they may be easily used during electronic transactions.

However, the misuse or emergency use of a personal credit card can get an individual into trouble. When an individual charges more than they can pay off, they may find that their balance will start to grow due to the interest that is charged to them. That interest is based on the annual percentage rate (APR) of the card. Under the CARD Act there are rules on when credit card companies may raise APR's.

A credit card company cannot raise an APR within one year of a consumer opening a new card unless one of a number of exceptions apply. To start, an APR can be raised if the increase was disclosed to the cardholder. Also, if a consumer fails to make payments on their credit account for more than 2 months they may see their APR increased. In some cases national indexes may change, thereby raising APR's outside of lenders' control. Under these circumstances, an APR rate can still be raised within the first year of a card's issuance. An APR may rise if a consumer fails to follow the terms of their debt settlement or work-out with their credit card company. These are some of the ways that consumers may be affected by rising APR's.

The CARD Act provides some protections for individuals who are struggling with credit card debt. Attorneys who work in the debt relief field may be able to advise them on how to address their needs.

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Mark T. Young & Associates
2895 Northpoint Blvd.
Hixson, TN 37343

Toll Free: 888-376-0282
Phone: 423-933-1606
Fax: 423-877-0363
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