§1666i–1 Limits on Interest Rate, Fee, and Finance Charge Increases Applicable to Outstanding Balances

Summary

Credit card companies must not raise the interest rate, fee, or finance charge on money you already owe, except in a few specific cases. They can raise the rate if they told you ahead of time that the rate would change after a set time and the new rate is the one they said and won’t apply to purchases made before that time. They can raise a rate that changes with a public index they don’t control. They can raise rates because you finished or broke a hardship plan, but the new rate or fee for that kind of charge cannot be higher than it was before the hardship plan started and you must have been told the plan’s terms before it began. They can also raise a rate if you miss a required minimum payment by more than 60 days, but they must send a written notice saying why and that the increase will end no later than 6 months if you make the required payments on time, and they must stop the increase within 6 months if you do. The card issuer cannot change how you repay the existing balance except by offering one of these choices (or an option that is at least as good): a repayment plan that pays off the balance in not less than 5 years starting when the increase takes effect, or a required minimum payment that includes a percentage of the balance that is no more than twice the percentage required before the increase. “Outstanding balance” means what you owe as of the end of the 14th day after the issuer gives the required notice of an increase.