We’ve all looked at one of those credit card offers and liked the idea of having a little extra cash for fun. Or maybe you’ve gotten in a financial bind and needed a new credit card to pay an old bill. Even with the best intentions, the high interest rates on credit cards can get us into more financial hot water. While the Hoosier State has some consumer safeguards when it comes to interest rates, most consumers agree to higher rates as a condition of getting credit. This is a quick summary of interest rates laws in Indiana.
Interest Rates Laws
Indiana law, as in most other states, limits the amount of interest a creditor can charge. The limit and default is 21 percent for unsupervised consumer loans, and eight percent of judgments. The following table lists the main provisions of Indiana's interest rate laws.
| Legal Maximum Rate of Interest | 21% for unsupervised consumer loan (24-4.5-3-201) |
| Penalty for Usury (Unlawful Interest Rate) | Class A misdemeanor for supervised lender to knowingly charge in excess of 24-4.5-3-508 for consumer loan (24-4.5-5-301); consumer has right to refund of amount paid in excess of statute and up to 3 times the amount in its discretion (24-4.5-5-202) |
| Interest Rates on Judgments | At contract rate not exceeding 8%, or 8% if there is no contract between the parties, beginning from the date of verdict or the finding of the court (§24-4.6-1-101); 6% beginning 45 days after judgment if against the state (§34-54-8-5) |
| Exceptions | Supervised loan is a consumer loan in which rate of loan finance charge exceeds 21% (24-4.5-3-501) |
While it's obviously easier said than done, the best way to avoid getting in trouble with the an extremely high interest rates on a credit card is to avoid credit card debt in the first place. The best practices to avoid debt include using credit cards responsibly and paying off your balance as soon as possible. If you do find yourself with substantial credit debt, you may still be able to utilize some consumer protections under federal law.
Indiana Interest Rate Laws: Related Resources
Trying to comprehend the terms of service for credit cards can be confusing, and dealing with credit card debt can be a frightening prospect. If you would like legal assistance regarding a credit card case, you can contact an Indiana consumer protection attorney in your area. You can also read Usury Laws and Limits on Credit Card Interest Rates to learn more about this topic.
