Have Your Credit Card Interest Rates Increased Recently?
Consider this a public service announcement.
Many credit card companies are raising their interest rates, and many customers are unaware of the changes.
Credit card companies are alerting their customers of these interest rate hikes. However, many people will simply file away their statement, unopened, and miss out on hearing about these potential changes.
Some of the largest credit card issuers in the United States, including Capital One and Citibank, have been raising their interest rates over the past number of months. Some of the rate increases have been absolutely astronomical.
They are not just targeting people who have a history of missing payments and carrying very large balances. They are targeting everyone.
I've heard from numerous people who have pristine credit records and an unblemished payment history. Even they are getting hit with massive increases.
Credit card issuers are blaming the poor economy for these hikes. They say that a much higher rate of defaults has forced their hand, and they have no choice but to increase interest rates, even on their best customers.
There are new laws coming into effect that will require credit card issuers to give their clients 45 days notice of any potential rate increases, as well as making the notice of such future increases more prominent in their customer communications.
However, these laws don't come into effect until July of 2010, so many credit card companies are rushing to jack up rates in the meantime.
If you are unsure as to what your current rate is, then you should pull out any recent correspondence from your credit card company. Read through the fine print.
If you still aren't sure, then pick up the phone and give them a call. Ask them what your current interest rate is. I've heard of people with great credit having their rates raised from 6.9% to nearly 20%.
If you have a strong credit history and recently had your rates raised, pick up the phone and ask to speak to someone at the CC company about your interest rate. Ask for your previous interest rate to be restored. Tell them that you are planning on paying off your balance and canceling your card if they don't. I know of at least half a dozen people that have had their old interest rate restored by going this route.
Failing that, you can always:
1. Resolve to pay off your balance every month so that you avoid the astronomical rates
2. Cancel your card.
Be vigilant about your rates, and understand that many major issuers are currently raising rates on just about everybody right now.
If you are currently carrying a balance and can't afford the new interest rate charges, then you may want to investigate cards that offer a 0% balance transfer for up to 12 months.
Filed under: General Knowledge