I was notified recently that a credit card that I've had for years is suddenly going to increase my interest rate by the end of the year. There was no explanation or reason given and the only way out of it, according to the notification, is to cancel the card. I have always paid the card early or on time, never missed a payment and I always pay more than the minimum. I usually double it in fact. Is there any way to prevent this interest rate hike? I truly cannot afford it but I need to keep the card open as well.
Polite, sincere, constructive answers that apply only to the question asked please.
2009-11-16T11:35:17Z
FYI: My not being able to afford an interest rate hike has nothing to do with me carrying too much debt. I can't think of any normal-thinking person who would enjoy an interest rate hike.
Lucy Lu2009-11-16T11:43:16Z
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Can them up and ask to have your rate lowered . They are doing this because they can. Next year, they won't be able too. If they don't lower your rate, close your account. Trust me, you can do without a credit card. Millions of people are realizing that this year they have be ripped off by them and are now refusing to get credit and are paying off their cards for good.
Look I am in the same boat, I could afford the card at the rate it was obtained at, but with the rate hike I am totally being ripped off. I AM defaulting on the card because I have a good argument. They can choose to take me to court but they defaulted on the American people when Capital-One and others started raising rates after the stimulus, The stimulus was to increase credit for the people and make it easier, not to rip off the public with these hikes. My rate increased 11% in 5 months, making the min payment much higher, about the same I would have normally paid. They can try and screw my credit, but under the fair credit act they better be dam careful, I am expired in this area and what they are doing is illegal. my score is 740, I have not been late ever and have had to do this before. (But I have had a legal argument in each case preventing it from harming my credit)
The banks are all bleeding money due to record high credit card default rates. Compounding their problems is the Credit CARD Act of 2009. Once the bill takes effect in February, there will be restrictions on interest rate hikes for all credit card issuers, so between now and then, the banks are doing all that they can to shore up their books and this means ratcheting up interest rates. It’s not fair to consumers, but there will be some correction to these practices once the law becomes active. Unfortunately, there’s not much you can do. If you have good credit, you can shop around for a card that has a lower interest rate, transfer or payoff your balance and then close your old account. Other than that your only option is to accept the new interest rate, even if it is only for the period of time it takes you to payoff and close out your account.
Banks are doing this because sometime next year they will not be able to have those crazy high interest rates so they are trying to make money now. There is nothing you can do besides close the card and pay it off or stick with the interest rate they are giving you and keep the card.
The only way to avoid paying interest is to pay in full each month. That way you get top 800+ scores and top notch respectable credit.
If you can't pay in full, try as hard as you can to put as much on it as possible. You can also call them, and just threaten to close the account unless they lower the interest rate. If you have good credit - they WILL lower it again. /