Companies that issue credit cards do so and charge varying interest rates that are determined by various factors. Among them are the market forces. They may also want to put into consideration the type of borrower the card is being issued to. For example, borrowers who have poor financial records or who have been declared bankrupt tend to pay higher interest rates than those whose records are deemed as perfect.
Credit card rates tend to increase, especially when there is inflation. A lender may also decide to slap you with increased rates when you are seen to be sleeping on your payments. If you become a constant offender who does not pay on time, high rates may follow. You can however negotiate your way out of the increased rates and promise to pay promptly. However, there is law that governs the implementation of these rates. They are meant to protect the consumer from exploitation.
The new and revised bill that seeks to protect credit card holders provides that, the promotional interest rate should last for not less than six months. The rates should also not be increased within the first year after an account has been opened. This gives the lender an allowance to study your payment habits. If the lender is to hike the rates for any reason, he has to give a notice of 45 days.
The pending bills for all borrowers should also be delivered 21 days before the due date. Since it is not uncommon to see people under 21 years of age using the cards, the bill requires them to prove that they are able to cope up with the repayment claims. If not so, they should have a parent or guardian taking up the responsibility to repay in case of difficulties arrising.