In other countries I read if a credit card issuer raises interest rates a person, by law, can reject the increase and if rejected the persons account will be closed when the balance is paid off. What is the law in New Zealand regarding this?
That would be correct. A unilateral contract change would allow you to reject the proposed changes, which would then result in them terminating the contract (which they cannot penalise you for).
However, what would actually happen is that the entire balance becomes due and payable immediately, and you would need to pay it off. This is because the credit contract has been terminated.
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