Last reviewed: 7 October 2026

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When a credit card issuer can raise your interest rate: the Regulation Z limits

The CFPB says a card issuer generally must give 45 days of advance notice before it raises the rate on new purchases, and is generally restricted from raising the rate on a balance you already owe, with listed exceptions.^[1] The rule is Regulation Z, 12 C.F.R. § 1026.55, and its notice, review and payment-allocation companions. This page walks through the text for a credit card account under an open-end (not home-secured) plan. It does not say whether your issuer will raise your rate or what you should do.

The short version

• The default rule is no increase. Section 1026.55(a) says a card issuer must not increase an annual percentage rate, or a fee or charge of the kinds it names, on a credit card account, except as paragraph (b) allows.^[2]
• The exceptions are listed. Section 1026.55(b) has seven: a temporary rate that expires, a variable rate that follows its index, an increase after proper advance notice, a delinquency of more than 60 days, a workout or hardship arrangement, the end of a Servicemembers Civil Relief Act rate reduction, and an index replacement.^[2]
• Notice comes first. A significant change in account terms generally requires written notice at least 45 days before it takes effect, and a rate increase for delinquency, default or as a penalty requires its own 45-day notice.^[3]
• A rate increase after notice is not permanent by default. For increases that required 45 days’ notice, the issuer must review the increase at least every six months and reduce the rate as appropriate, and a rate raised for a 60-day delinquency must come back down after six consecutive on-time minimum payments.^[4][2]

The rule in plain terms

The CFPB’s consumer page makes three points. A card company is generally not permitted to increase your rate on new transactions during the first year of the account. After that, it must give 45 days of notice before a rate change, and purchases made more than 14 days after the advance notice are considered new transactions. And the company may not raise the rate on your existing balance except in listed circumstances.^[1]

The regulation says the same thing in more detail. Under section 1026.55(b)(3), an issuer may increase a rate after giving the notice required by section 1026.9(b), (c) or (g), but it may not apply the increased rate to transactions that occurred before the notice (for a notice under section 1026.9(b)) or before or within 14 days after the notice (for a notice under section 1026.9(c) or (g)). That exception does not allow an increase during the first year after the account is opened, while the account is closed, or while the issuer does not permit new transactions.^[2] The first-year limit is not a flat bar on every kind of increase: the Bureau’s official commentary says that, although section 1026.55(b)(3) does not permit an increase during the first year, an issuer may increase the rate during the first year under the 60-day delinquency exception in section 1026.55(b)(4) if the required minimum payment is not received within 60 days after the due date.^[5]

The seven exceptions in section 1026.55(b)

Section 1026.55(b) also says an issuer may use any of these exceptions even if the increase would not be allowed under a different exception.^[2] Section 1026.55(e) adds that if an issuer promotes a waiver or rebate of finance charges, ending the waiver or rebate counts as an increase for purposes of the section.^[2]

The 60-day delinquency exception, step by step

1. The required minimum payment is not received within 60 days after its due date.^[2]
2. The issuer sends a written notice at least 45 days before the increase takes effect, after the event that triggers the increase. Under section 1026.9(g)(3) the notice must state that the penalty or delinquency rate has been triggered, the date it applies, the circumstances under which it will stop applying, to which balances it applies, and, for a credit card account, no more than four principal reasons for the increase.^[3]
3. If the issuer receives six consecutive required minimum payments on or before the due date, beginning with the first payment due after the increase takes effect, the issuer must reduce the rate, fee or charge to what applied before the increase, with respect to transactions that occurred before the notice or within 14 days after it.^[2]

The CFPB states the same outcome: if your rate increased because you were more than 60 days late, the issuer must reinstate your old rate if you make six consecutive on-time payments of your minimum balance after the effective date of the increase.^[1]

Balances the new rate cannot reach

Section 1026.55(c) defines a “protected balance” as the amount owed for a category of transactions to which an increased rate cannot be applied after the rate has been increased under the advance-notice exception. The issuer must not require repayment of a protected balance by a method less beneficial to the consumer than one of three: the method of repayment before the increase, an amortization period of not less than five years beginning no earlier than the effective date of the increase, or a required minimum payment that includes a percentage of the balance equal to no more than twice the percentage required before the increase.^[2] The section continues to apply after the account is closed or acquired by another creditor.^[2]

Rate reviews after an increase

Under section 1026.59, if an issuer increases a rate based on the consumer’s credit risk, market conditions or other factors, and 45 days’ advance notice is required, the issuer must evaluate specified factors and, based on its review, reduce the rate as appropriate. The review must happen at least once every six months after the increase, and a required reduction must be made within 45 days after the evaluation is complete. Any reduction applies to outstanding balances that carried the increased rate and to new transactions after the reduction takes effect.^[4]

The issuer must review either the factors on which the increase was originally based or the factors it currently uses for similar new accounts.^[4] The CFPB describes it this way: if your rate is higher than what you would be charged as a new customer, the issuer must reduce it, though not necessarily to your original rate.^[1] For an increase under the 60-day delinquency exception, the issuer is not required to perform the review before the sixth payment due date after the increase, but must do so if the rate was not reduced under section 1026.55(b)(4)(ii).^[4]

How payments above the minimum are applied

This matters when you carry more than one balance, for example a promotional balance and a regular one. Section 1026.53(a) says that when a consumer pays more than the required minimum on a credit card account under an open-end (not home-secured) plan, the issuer must allocate the excess first to the balance with the highest annual percentage rate and then to the others in descending order of rate.^[6] There is a special rule for balances under a deferred-interest or similar program: the issuer either applies the general rule, except that during the two billing cycles immediately before the deferred-interest period expires the excess must go first to the deferred-interest balance, or, at its option, allocates the excess among the balances as the consumer requests. Secured balances have their own option for the issuer to follow a consumer request.^[6] The text of this section says nothing about which balance receives the minimum portion itself.^[6]

For how balance transfers and other balances interact, see balance transfer cards for paying down debt.

What this page does not cover

It does not cover home equity lines, which section 1026.55 excludes by its terms, or the separate limits on penalty fees, or what your own card agreement says. It does not say whether a specific increase on your account complied with the rule; that depends on your notices and statements. The CFPB’s consumer page says to contact your card issuer if you believe your rate was increased in error.^[1] See credit card billing disputes for the separate billing-error process, and what happens when you stop paying a credit card. This is general information, not legal or financial advice.

Your next step

The notice an issuer sent and the account agreement are the documents these exceptions turn on, and the dates on a notice can be compared with the exceptions above. For where complaints about card issuers go, see where to file a credit or debt complaint. For the options when payments are behind, see how to ask a card issuer for a hardship plan.

When we will update this page

We revisit it when sections 1026.9, 1026.53, 1026.55 or 1026.59 are amended or the CFPB updates its page. The eCFR text was read on 7 October 2026.