We’ve all be enticed by credit card offers, whether it’s the idea of getting a little extra cash getting out of a little financial bind. Even when we promise ourselves we’ll be responsible, the high interest rates that credit cards charge can get us into trouble in a hurry. Fortunately, the Old Line State has some consumer protections that limit interest rates on credit cards, judgments, and loans. This is a brief summary of interest rates laws in Maryland.
Interest Rates Laws
Each state has its own interest rate laws, that help consumers by placing a limit on the amount of interest a creditor can charge. The legal maximum in Maryland is 6%, but can be 8% under a written contract. There are also some exceptions for mortgage loans and installment contracts for automobiles and other consumer goods.
Interest Rates Laws in Maryland
The following table highlights the main provisions of Maryland's interest rate laws.
| Legal Maximum Rate of Interest | 6% (Const. Art. III §57); up to 8% in written agreement (Com. Law §12-103) |
| Penalty for Usury (Unlawful Interest Rate) | Forfeit 3 times excess of interest and charges collected or $500, whichever is greater (Com. Law §12-114) |
| Interest Rates on Judgments | 10%; money judgment may carry contract rate until originally scheduled maturity date (Cts. & Jud. Proc. §11-106, 107, 301) |
| Exceptions | Mortgage secured loans (Com. Law §12-103); unsecured loans secured by other than savings (Com. Law §12-103); installment loans not secured by real property (Com. Law §12-103); open-end retail accounts (Com. Law §12-506); installment sales contract for motor vehicles and other consumer goods (Com. Law §12-609, 610) |
Obviously the best way to avoid getting into financial trouble with a high interest credit card is to avoid credit card debt before it begins. And your best strategies for avoiding debt are using your credit cards responsibly and paying off your entire balance as soon as you can. That’s often easier said than done. Should you find yourself in significant credit debt, you may still have some consumer protections under federal law.
Maryland Interest Rate Laws: Related Resources
Comprehending the terms of service for credit cards agreements or loans can be difficult. If you would like legal assistance regarding a credit card or interest rate matter, you can also contact a Maryland consumer protection attorney. You can also visit FindLaw’s section on Usury Laws and Limits on Credit Card Interest Rates for more information and resources on this topic.
