Is there a limit on interest credit cards can charge?

From time to time, many Americans have had to rely on credit cards to get by. While credit cards provide easy access to much needed money, they can also create long term challenges to many Mississippi residents. Credit card payments often balloon out of control. The minimum payments are not nearly enough to pay down the debt and people can get stuck in a cycle of borrowing.

Additionally, the worse financial situation a person is in, the higher the interest rate a credit card tends to charge. The card companies justify this by arguing that they are taking a higher risk by lending to people with lower credit scores. People who are facing financial challenges can only see these challenges increase as interest rates, minimum payments and their overall debt increase.

Some Mississippi residents may wonder if there is ever a time when these increases stop. Are there limits to how much interest a credit card company can charge consumers? Generally, there are no laws that limit the amount of interest that a credit card company can charge a borrower. This means that it is not unusual for card companies to charge very high interest rates to people borrowing money.

In 2009, Congress passed the Credit Card Accountability Responsibility and Disclosure Act. This law has limited some of the actions that credit card companies can take. For example, the CARD Act requires card companies to inform borrowers of rate increases at least 45 days before they occur. Other notices are also required if the company changes other terms of the credit card.

Despite legislation to try and protect consumers, credit card companies have a large amount of power over the people who use their products. Credit card debt can quickly become overwhelming to these individuals. By speaking with an attorney, people who are struggling with credit card debt can learn more about their specific debt relief options.

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