How to be Aware of Increases in Credit Card Rates

Credit card companies are increasing rates and fees as a response to the losses they have experienced in this economic recession. The Obama Administration is currently passing legislation to help protect consumers from these sudden increases in rates and fees. It is important for credit card account holders to be aware of these changes to their accounts.

Difficulty: Easy

Instructions

1. Read all material sent via the mail from any company with whom you hold a credit card account. Companies are required to notify you via mail of any changes to your account agreement. Most agreements state that rates will increase in the event that an account is not in good standing. Recent changes have occurred to even those accounts without any late or missed payments. The explanation is simply that the company is reacting to their own losses and increasing the rates on their consumers' accounts. It has been reported that rates as low as 6% APR have increased dramatically to 24.9% APR.

2. Review all monthly statements. Credit card companies make mistakes and it is doubtful that they will be the ones to identify the error first. Protect yourself and your money. A recent report stated that a credit card company had erroneously increased a 3.9% fixed APR to 15.75%.

3. Contact your credit card company immediately if you receive a notice of change in terms or if you identify an error. If your account is in good standing you may be able to negotiate a lower rate.

4. Decrease your credit card debt immediately! Many individuals and families have experienced a decrease or loss of income and have become more dependent on credit to make ends meet. It is extremely disheartening to imagine the stress for those already experiencing financial hardship to soon be faced with rates as high as 25% on credit cards used as their last safety net.

Tips & Warnings

• New legislation is not scheduled to take effect until July 2010. The link is below.
• If you take advantage of any balance transfer offers, remember that those rates can also increase at the discretion of the company and that most balance transfer fees are a minimum of 3% with no maximum.
• Even FIXED RATE cards are being affected by these increases.
• Many companies are also decreasing credit limits on existing accounts.

Resources

• House Panel Approves New Credit Card Rules
• How to Make a Credit Card Balance Transfer
• How to Pay Off Credit Card Debt

[nobadday]

on 8/12/2009 awesome info..will pass it on. thanks for the info 5*.

[violet4me]

on 6/25/2009 Credit card companies are already raising rates and minimum payments to keep from losing all those high late fees for being one day or several hours late! Great article!

[2besure]

on 5/27/2009 For years, my Pastor was tell us to get rid of our credit cards. Now I see why.

[kristara]

on 5/7/2009 Excellent article! I just had this happened today my rate increased by 15% with no reason. Credit card company was very rude, they really don't care. 5*

[kp3028]

on 5/7/2009 We live in an 'upside down world' when you will raise the rates of the credit cards in the hands of people who are already struggling to pay the bill. *5