Who hasn’t looked at one of those enticing credit card offers and liked the idea of having a little extra cash to splurge with? Many of us have gotten in a little financial bind and wondered whether getting a new credit card to pay an old bill was a good plan.
Even with the best intentions, though, the high interest rates that credit cards companies charge can get us into even more financial hot water. Lucky for us, the Badger State has some consumer safeguards in place regarding interest rates on credit cards, judgments, and loans. This is a quick introduction to interest rates laws in Wisconsin.
Interest Rates Laws
Wisconsin’s interest rate laws are similar to those in most other states, and limit the amount of interest a creditor can charge. The default maximum rate is 5%, but higher rates can be enforced if there is a written contract. Additionally, there are some exceptions for credit union and S&L loans, as well as installment contracts for automobile purchases.
Interest Rates Laws in Wisconsin
The following table highlights the main provisions of Wisconsin's interest rate laws.
| Legal Maximum Rate of Interest | 5% unless otherwise agreed in writing (§138.04) |
| Penalty for Usury (Unlawful Interest Rate) | Lender intentionally violating fined $25 to $500 and/or prison up to 6 months (§138.06(2)) |
| Interest Rates on Judgments | 12% (§815.05(8)) |
| Exceptions | State-chartered banks, credit unions, savings and loans, etc. (§138.041); residential mortgage loans (§138.052(7)); loans to corporations (§138.05(5)); installment contract on auto (§218.0142) |
Sure, it’s obviously easier said than done, but the best way to avoid getting into trouble with the an exorbitant interest rate on a credit card is to avoid credit card debt in the first place. And the best way to avoid debt is by using your credit cards responsibly and by paying off your entire balance as soon as you possibly can. If you should find yourself in substantial credit debt, there may still be some consumer protections under federal law available to you.
Wisconsin Interest Rate Laws: Related Resources
Trying to decipher the terms of service for loans and credit cards can seem impossible, and trying to manage credit card debt can be a frightening prospect. You can visit FindLaw’s section on Usury Laws and Limits on Credit Card Interest Rates for additional articles and resources on this topic. You can also contact a Wisconsin consumer protection attorney if you would like legal assistance regarding a credit card or interest rate matter.
