How can I deal with credit card companies changing rates?

Changing credit card rates can be disastrous. In today’s economy, people are forced to use credit cards as a temporary means of survival. However, the more credit you use, the higher your rates are raised. Below are some helpful ways to deal with the changing credit card rates.

Use the credit card finder to find the best credit card offer to suit your lifestyle needs.

Credit cards are a nifty way of paying your expenses with the ability to break up the grand total into affordable payments. However, if your interest rates are too high then you are simply paying interest, which can lead to financial distress anyway.

Why do credit card companies change their rates?

When an applicant is considered a high risk, they fall into the higher interest rate category. People often find that if they use their cards wisely and make their payments on time, their rates will be decreased because they have proven that they are no longer a high risk. If you miss or are late with your payments, that’s where the trouble begins.

Credit card companies use interest rates to make a profit and protect themselves. They always seem to be more than happy to approve your application, but their ultimate goal is to make money, which is by charging interest in exchange for extending that line of credit to you.

Are credit card companies required to notify me when my interest rate is changed?

Yes. But it is often in the form of a tiny pamphlet with extra small fine print. Be sure to read it since it explains why the company is making changes and how they will affect you personally.

Rates can change at the discretion of the company. You can read more about the rules and regulations surrounding the credit card world at the Federal Trade Commission website.

Do I really need a credit card?

Millions of people are being thrown into financial distress by credit cards and their rising rates. Some people try to avoid credit cards completely by paying for everything in cash. But what happens when an emergency arises? The car needs expensive repairs, or a family death occurs? Sometimes credit is necessary.

In ideal cases, people have two credit cards maximum. Credit card balances should be paid off completely at the end of each billing cycle in order to avoid paying interest. If that is not possible, then the goal should be to keep it at the lowest possible balance and pay it off as quickly as possible.

Are credit card late charges really going to hurt my credit score?

Yes! Your credit score is one of the most important pieces of your financial profile. It is an important factor that is used for:

Loan approvals
Credit card interest rates
Mortgage rates
Car payments

One single late payment on a credit card can cause your credit score to be lowered, which in turn causes your interest rates to spike.

You can check your credit score once a year for free at AnnualCreditReport.com.

What are the perks of credit cards?

Some companies offer rewards when you use their cards: cash back, bonus points, gifts, or other incentives. Sometimes these rewards credit cards can offset the pain of the interest rates. On the other hand, if you use the card solely for the rewards and pay off the balance every month, you may even come out ahead.

Special offers are available through some credit cards that offer zero percent interest on balance transfers. This could shave hundreds of dollars off your ending balance.

Cash rebate rewards can tip the scales a little as well. In some cases, you can earn anywhere from 1-10% cash back on your eligible purchases.

If you are a frequent traveler, it might be beneficial to use a card that is geared towards offering customer rewards when using an airline credit card to purchase your tickets. When you have accumulated a certain amount of airline points, free or largely discounted tickets may be available to you.

Fuel credit cards used only for the purchase of gasoline can take some pressure off your monthly gas bill. They are usually only accepted at that company’s gas station, but the price per gallon is usually lower than that of other stations.

Other credit card companies work in conjunction with particular theme parks. If you sign up for their credit card, you can receive large discounts on entrance tickets to that park.

Use the credit card chaser to compare credit cards and interest rates to find the card that is right for you.