A credit card company can raise your interest rate for any number of reasons. They can raise your rate if you skip a payment, or if your credit score decreases. If you have an adjustable-rate card, an increase in its stated benchmark like the Federal Funds rate can cause your credit card rate to be increased. In most cases, federal law requires that you receive 45 days' notice of the increase and that the higher rate be applied only to new purchases, not the entire balance. The exception is for payment that is overdue by more than 60 days. That is officially a default, and the entire balance will be subject to the higher rate. By federal law, the rate hike on the existing balance must be reversed if the customer pays on time for six consecutive months. A credit card issuer can raise (or lower) the interest rate on your card for any of several reasons: Your rate can increase from your standard rate to a penalty rate because you paid a bill late, bounced a check, or exceeded your credit limit. If you follow all of its rules to the letter for six months, the interest rate on any balance should decrease to the standard rate. Your rate on new purchases might not decrease. Your rate can increase (or decrease) if you accept a credit card that has an adjustable interest rate. The rate you pay on your entire balance, not just new purchases, is based on a stated rate such as the Federal Reserve prime rate. For example, your rate may be the Federal Reserve prime rate plus 13.3%. The formula will be stated in the credit card disclosure of terms. Your rate can increase if you accept a credit card with a special introductory rate. The special low rate will expire, usually after six to 12 months, and your rate will increase on the full balance as well as new purchases. The exact terms will be in the disclosure of terms.