Across the country people with good credit scores have opened up their credit card bills only to find that their rates have been increased for no apparent reason. This is frustrating and seems downright wrong, but it is perfectly legal to do so. At least until the new credit card laws go into effect. In the meantime, you are stuck with a new interest rate, which in turn increases the amount that you owe to your credit card company.
It is even worse for those individuals with less than perfect credit, or who have missed payments on their credit cards in the past. Even if it has been a while since they have missed a payment, with the current economic situation and with credit card companies facing more stringent laws about their interest rates coming into effect soon, many credit card companies are rushing to ensure that they raise their rates as high as possible so that they can recoup costs from non payers, preempt the possibility of you not making future payments, and simply ensuring that they can make as much money as possible.
Many people think that their hands are tied in these situations and simply make their payments while grumbling about the changes. However, the truth is, you have recourse for this situation; you just have to be willing to do two things. First you need to be willing to do some legwork to make some changes; and secondly you need to be willing to make some hard choices.
Make a Simple Phone Call
You work hard to make your payments on time each month and you make more than your minimum payment only to find a higher interest rate in you next bill. This can make a lot of people angry, but instead of getting angry, pick up the phone. There are many reasons that your credit card company will hike an interest rate and one of them is that they annually raise rates. If that is the case, then it is very possible that you will be able to call and get your rates reduced.
Good customers are getting harder and harder to find and many credit card companies are willing to do whatever it takes to ensure that they do not lose the customers that pay their bills on time every month, especially if you are still using your card regularly. Speak to the customer service department, and if necessary the supervisor or manager of the department, and explain to them that you want to have your interest rates reduced.
In the course of the conversation stay calm and reasonable, explain why your interest rates should not have been increased. If they mention a late payment in your past, explain why it occurred (you were out of town and forgot, you were in the hospital, etc.). As long as you are not traditionally late on your payments, this should not be an issue (unless it was the previous month’s payments and you may have to make several on time payments again to prove that this will not be a trend).
If they refuse to reduce your rates, then it is time for you to get tough and make a couple of decisions about your credit card.
When to Get Rid of the Credit Card
As you probably know, your credit score is based on your credit history. If you have a card in good standing for a number of years, then it is having a positive affect on your credit score. This leads to the question as to whether or not you should cancel your credit card if they will not lower your interest.
If you have many credit cards in good standing, then you can probably afford to pay off your credit card and close the credit account without affecting your credit score. However, if this is the only credit card that you have, then you will want to keep the card. That does not mean you should not pay it off. On the contrary, pay off the card and stop using it. Make sure that your credit card company knows that you intend on paying off the credit card and putting it on the back burner. If you have the cash, pay it off right then, if you do not then you will need to either save the money to pay off the card or get another low interest credit card and transfer your debt to the new card.
Even though the economy is tough, banks are still offering great deals for new customers with good credit scores. Even if you have less than perfect credit, a low introductory rate is usually available, although it will not be as low as if you have perfect credit, it will likely be lower than any increased rate that you are receiving from your current credit card company.
Apply for a new card and transfer you balance; however, you need to ensure that you find a card that has a long introductory rate of six months or longer and you also want to try to pay off your balance before the low introductory rate increases. You will also want to ensure that when the low introductory rate deal is over that the new rate is something that you can live with. We can help you with that, but more on that in just a bit.
How to Choose a New Credit Card
As mentioned before, you want to find a new credit card with a low introductory rate. You also want to ensure that you understand exactly when the rates will increase and how much they will increase. Every credit card offer comes with terms and conditions that will clearly state the introductory interest rates, how long that rate is effective, and what the rates will increase to when the introductory period is up. What’s more, they will also explain what your rates will increase to if you miss a payment (and how many payments you can miss, if more than one, before your rates will increase).
Choosing the right credit card can take you a lot of time. If you are looking for low introductory rates, then you will have to read the terms and conditions of every card with a low introductory rate to see how long they last and what they increase to.
On the other hand, you could use our Credit Card Chaser consumer tool to find the credit cards that fit your criteria, which will save you a great deal of time. Our chaser tool will find all of the best credit card deals that meet your criteria. If you want a rewards card with a low introductory rate, we can find it for you. If you want a card with a picture of a beach on it, then we can find the credit card companies with that as an option that still fits your other criteria. No matter what kind of situation you are looking for from your credit card, if it is out there, then we will find it for you. Just fill out the form found here and you can use the tool to start “Chasing” down the best credit cards for you!
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