Lower Cap on Credit Card Interest.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 1
HOUSE BILL 508

Short Title: Lower Cap on Credit Card Interest. (Public)
Sponsors: Representative Lowery.
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
Referred to: Commerce and Economic Development, if favorable, Finance, if favorable, Rules,
Calendar, and Operations of the House
March 26, 2025
*H508-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO LOWER THE CAP ON CREDIT CARD I NTEREST AND TO MAKE 2
TECHNICAL CHANGES. 3
The General Assembly of North Carolina enacts: 4
SECTION 1. G.S. 24-11 reads as rewritten: 5
"§ 24-11. Certain revolving credit charges. 6
(a) On the extension of credit under an open -end credit or similar plan (including 7
revolving credit card plans, plans and revolving charge accounts, but excluding any loan made 8
directly by a lender under a check loan, check credit credit, or other such similar plan) under 9
which no service charge shall be imposed upon the consumer or debtor if the account is paid in 10
full within 25 days from the billing date, but upon which there may be imposed an annual charge 11
not to exceed twenty-four dollars ($24.00), there may be charged and collected interest, finance 12
charges charges, or other fees at a rate in the aggregate not to exceed one and one-half percent 13
(11/2%) one and seventeen hundredths percent (1.17%) per month computed on the unpaid 14
portion of the balance of the previ ous month less payments or credit within the billing cycle or 15
the average daily balance outstanding during the current billing period. 16
(a1) If the lender chooses not to impose an annual charge under this section, the lender 17
may impose a service charge not to exceed two dollars ($2.00) per month on the balance of any 18
account which that is not paid in full within 25 days from the billing date. 19
(a2) No person, firm firm, or corporation may shall charge a discount or fee in excess of 20
six percent (6%) of the principal amount of the accounts acquired from or through any vendors 21
or others providing services who that participate in such the plan. 22
(b) On revolving credit loans (including check loans, ch eck credit credit, or other 23
revolving credit plans whereby by which a bank, banking institution institution, or other lending 24
agency makes direct loans to a borrower), if agreed to in writing by the borrower, such the lender 25
may collect interest and servic e charges by application of a monthly periodic rate computed on 26
the average daily balance outstanding during the billing period, such rate period at a rate not to 27
exceed one and one-half percent (11/2%). 28
(c) Any An extension of credit under an open -end or similar plan under which there is 29
charged a monthly periodic rate greater than one and one-quarter percent (11/4%) may shall not 30
be secured by real or personal property or any other thing of value, provided, that this subsection 31
shall value. This subsection, however, does not apply to consumer credit sales regulated by 32
Chapter 25A, the Retail Installment Sales Act; provided further, that in any Chapter 25A ("Retail 33
Installment Sales Act ") of the General Sta tutes. In an action initiated for the possession of 34
General Assembly Of North Carolina Session 2025
Page 2 House Bill 508-First Edition
property in which a security interest has been taken, a judgment for the possession thereof of the 1
property shall be restricted to commercial units (as defined in G.S. 25-2-105(6)) for which the 2
cash price was one hundred dollars ($100.00) or more. 3
(d) The In this section, the term "billing date" shall mean means any date selected by the 4
creditor and the creditor. The bill for the balance of the account must shall be mailed to the 5
customer at least 14 days prior to the date specifi ed in the statement as being the date by which 6
payment of the new balance must shall be made in order to avoid the imposition of any finance 7
charge. 8
(d1) A lender may charge a party to a loan or extension of credit governed by this section 9
a late payment c harge not to exceed five dollars ($5.00) on accounts having an outstanding 10
balance of less than one hundred dollars ($100.00) and ten dollars ($10.00) on accounts having 11
an outstanding balance of one hundred dollars ($100.00) or more, for any payment past due for 12
30 days or more; provided, in more. In no case shall the late charge exceed the outstanding 13
principal balance. If a late payment charge has been once imposed with respect to a late payment, 14
no late charge shall be imposed with respect to any future payment which that would have been 15
timely and sufficient but for the previous default. 16
(e) An annual or service charge pursuant to this section upon an existing credit card 17
account upon which the charge has not previously been imposed may shall not be imposed unless 18
the lender has given the cardholder at least 30 days days' notice of the proposed charge, charge 19
and has advised the cardholder of his the cardholder's right not to accept the new charge. This 20
notice shall be bold and conspicuous, conspicuous and shall be on the face of the periodic billing 21
statement or on a separate statement which that is clearly noted on the face of the periodic billing 22
statement provided to the cardholder. If the cardholder does not accept the new charge upon an 23
existing credit card account, the lender may require that the cardholder make no further use of 24
the account beyond the 30 -day period in order to avoid paying the annual charge, but the 25
cardholder shall be is entitled to pay off any remaining balance according to the terms of the 26
credit agreement. Nothing in this subsection shall limit limits the lender from decreasing any 27
rates or fees to the cardholder forthwith. Should any cardholder. If a cardholder within 12 months 28
of the initial imposition of an annual charge rescind his rescinds the cardholder 's credit card 29
contract and surrender surrenders all cards issued under the contract to the lender, he shall be the 30
cardholder is entitled to a prorated refund of the annual fee previously charged, credited to the 31
cardholder's credit card account." 32
SECTION 2. This act becomes effective October 1, 2025, and applies to interest, 33
finance charges, and fees charged on or after that date. 34