The United States Congress passed the Credit Card Accountability Responsibility and Disclosure Act in 2009. This act, also known as the Credit CARD Act, was meant to address abuses committed by credit card companies in their dealings with the public. As such, the act offers credit cardholders and credit card applicants various protections, including protection against abuses related to annual percentage rate (APR) increases.
Under the Credit CARD Act, credit card issuers are not permitted to increase the APRs of cardholders within a year of the opening date of a particular account except in the following situations:
- The bank disclosed beforehand that the rate would be increased at a certain time when the customer opened the account.
- The APR increase happened as a result of indexes that the issuer cannot control.
- The consumer did not follow the workout arrangement provided by the card issuer. Such arrangements could be provided to a customer who is having a difficult time making payments.
- The holder of the card has failed to submit the minimum payment for a two-month period.
In other circumstances than those referenced above, the card issuer must wait 12 months before instituting a rate increase, and in these cases, the card issuer can only apply said rate increase to new transactions. Furthermore, this new percentage rate needs to have been disclosed previously to the customer.
If changing APRs have caused you to have a hard time affording your monthly credit card bills, you might want to look into various strategies to pay off your outstanding debt. By discussing your situation with a Washington debt relief attorney, you might be able to get a better idea of which legal methodologies could help your situation.