Although credit card companies can’t change interest rates without the consent of their customers, new applicants can be charged virtually any rate. Because credit card issuers change their standard, variable, and introductory interest rates on a regular basis, the best place to go for up to date information is the Credit Card Finder website.
Go to the FREE credit card finder website to get the most current rates and credit card offers!
You can also go to the official websites of individual credit card issuers to see what their current rates are. Some include complete credit card terms, but always remember to look at the date. According to the Federal Reserve, credit card companies can charge different set interest rates for different types of purchases and services. This means that a single issuer can charge multiple rates at the same credit cards.
When Credit Card Rates Increase
Credit card companies used to be able to increase rates, even for credit card that had a guaranteed APR, at almost any time. However, a new credit card law now prevents arbitrary credit card rate hikes. Card issuers can still change rates, but customers have to be informed well in advance. In addition, credit cardholders have the ability to retain their current interest rates if they don’t consent.
In effect, credit card companies can change their rates once every 45 days. Few companies do so, but the option remains valid. Your credit card company may have sent you literature indicating that quarterly reviews are standard.
To confirm what your credit card issuer’s policies are, contact customer service.
Your interest rate can also change if you don’t pay your monthly bills. Aside from late fees, default interest rates are applicable on most credit cards. Late credit card payments can also cause your interest rates to go up quickly. If you have variable interest rate credit cards, your rates can change for the better. On occasion, decreased interest rates are offered to credit cardholders that greatly increase their FICO scores.
Prevent Your Credit Card Rates from Being Hiked
Although there is no way to get a set interest rate on any credit card for life, there are ways that you can avoid being targeted for a rate hike. Maxing out your credit cards or even paying them off in full can send red flags to your creditors, even if it was unintended. Try to keep your utilization levels low, but don’t avoid using your credit cards altogether.
Try to build a good relationship with your credit card issuer and work with a specific entity when you have problems. If you have your credit card through a local bank or credit union, stop in periodically so that they can put a face to your name. Some policies are set in stone, but if you have a good rapport with a person of authority, you may be able to prevent your APR from being increased.
Sometimes credit card interest rates are increased because of the state of the economy, and in these instances, there is little that you can do to prevent it. Work with stable credit card companies so that your accounts aren’t sold every few years. Credit unions and companies like American Express are great options for consumers with good credit.
Being Hit with a Penalty Interest Rate
Default interest rates can cause your credit card debts to go up substantially, but they are avoidable. Scheduling your monthly credit card payments to come out automatically is a good way to keep your APR set.
If you end up paying the default interest rate, you need to take action immediately.
First determine why your credit card rate was set at the default APR. If you missed one or two payments, see if you can go back to your regular interest rate as a courtesy. Volunteer to pay your balance down, make an early payment, or have your credit limit reduced. If you show that you are willing to be flexible, you have a good chance of avoiding the default rate.
For credit cardholders that constantly pay late, default interest rates can be a way of life. Show your credit card issuer goodwill and you will be able to reap the rewards. Avoid using your credit cards until you have your debt under control, and within six months to a year, the penalty interest rate will go away.
Learn about low interest credit cards with the FREE credit card finder!
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