Credit card interest rates are important, especially when you're the type of cardholder to carry your credit card balances rather than pay them in full each month. Your credit card issuer can increase your interest rate at certain times as long as they send an advance interest rate increase notice.
The Truth in Lending Act, a Federal law that protects consumers against lenders, requires banks to send an interest rate increase notice 45 days in advance of the rate increase. During this 45-day window, you'll have the opportunity to opt-out of the interest rate increase if you don't accept it. If you choose to opt-out, the creditor will likely close your account, but allow you to repay the balance at the lower interest rate.
Credit card issuers don't always have to send an interest rate increase notice before increasing your interest rate. If the rate increase is due to a delinquency or default, the creditor doesn't have to warn you of a rate increase. Typically, these penalty increases are outlined in the fine print of your credit card agreement. For example, if you are at least 60 days late on your credit card payment, your card issuer could increase your interest rate without sending an interest rate increase notice or giving you a chance to opt-out.
