We’ve all gotten those credit card offers in the mail or online and they sound great. Who doesn’t like the idea of having a little extra shopping money? And who hasn’t gotten in a bit of a bind and needed a new credit card to pay a bill? Even when we have the best intentions, credit cards, especially ones with high interest rates, can get us into some sticky situations. Fortunately, the Tarheel State has some safeguards when it comes to interests rates. Here’s a quick overview of interest rates laws in North Carolina.
Interest Rates Laws
While most states still have laws limiting the amount of interest a creditor may charge, traditionally called "usury" laws, most consumer waive these protections by agreeing to higher rates. North Carolina interest rate laws set the maximum rate at 8 percent, but explicitly allow consumers and creditors to "contract for a higher rate." State law also exempts mortgage loans, equity lines of credit, and some other types of credit from the statutory limit.
North Carolina Interest Rates Statutes
The following table lists the main provisions of North Carolina's interest rate laws.
| Legal Maximum Rate of Interest | 8% (§24-1); may contract for higher rate if under $25,000; if over $25,000, may contract any rate (§24-1.1) |
| Penalty for Usury (Unlawful Interest Rate) | Forfeiture of all interest; party paying may recover double interest paid (§24-2) |
| Interest Rates on Judgments | 8% (§24-1) or at contract rate (§24-5) |
| Exceptions | Home loans secured by mortgage or first deed of trust (§24-1.1A); savings and loan associations (§24-1.4); loans to corporations (§24-9); equity lines of credit (§24-1.2A) |
While it’s often easier said than done, your best way to avoid extremely high interest rates on a credit card is to avoid credit card debt in the first place. Be sure to use the card responsibly and pay your balances as soon as possible. If you do end up having credit debt, you may still have some consumer protections under federal law as a consumer.
North Carolina for Interest Rates Laws: Related Resources Â
The long terms of service agreements from credit card companies can seem impossible to translate. You can visit FindLaw’s section on Usury Laws and Limits on Credit Card Interest Rates for a concise overview. If you think you might need legal assistance, you can contact a North Carolina consumer protection attorney in your area and schedule a consultation to discuss your case.
