Till sometime back it was up to the banks discretion whether to lower rate that was initially increased for certain reasons or not. There was nothing to compel them to reduce the increased interest rate. This pretty much put the banks and the creditors in control because they were under no obligation to review the situation and reduce an interest rate as long as the situation was working fine for them and making more money for them.
However, the new regulations that have been passed in February a second 2010 now require the creditors to review previous credit card interest rate increases and to see if circumstances have changed enough to lower the interest rate accordingly.
Before this law came about many credit card holders had no choice but to continue paying off the balance with the increased interest rate. The new laws brought into effect after February 22, 2010 also restrict the creditors from increasing the interest rate within the first year of an account’s opening unless you were late the terms and conditions of the credit card agreement such as defaulting on the account. Other circumstances under which the bank can change the interest rate within one year case if you have a variable interest credit card, your hardship arrangement has ended or a certain promotional rate of interest has come to the end of its term, the minimum for which is six months.