Credit card rates increasing

[melm00se]

for non-default reasons? You DO have an option.

It's called opting out.


How to Opt-Out of an Interest Rate Increase
Let Your Creditor Know You Reject the Higher Interest Rate

By LaToya Irby, About.com
See More About:

* credit card interest rates
* rising interest rates
* the truth in lending act

When your interest rate increases, you’re given an opt-out period during which you can reject the new, higher interest rate. If you opt-out, the card issuer will allow you to repay the balance at the old interest rate, but will likely close your account, making it impossible for you to continue using it.

You only have a short period of time to opt-out of the new interest rate, so you must act quickly to make sure your opt-out is effective.

http://credit.about.com/od/usingcreditcards/qt/optoutinterest.htm

[flvegan]

1. Yup, advised my mother to opt out of one this weekend going from 6%

to LIBOR + 12 points with a minimum of 14.99% APR. The opt out means she has to pay the balance by the time the card expires in 2 1/2 years. Also, check when your opt out final day is and when the changes come into play. With my mom's card, she had until January to opt out, but the new rate would have taken effect with the December bill, so ultimately, her payment for the December bill would have been at least +8%

Insane this trend.

[Gormy Cuss]

2. I hope "this trend" brings down the credit card industry.

There are far too many people who have had their own manageable credit card debt turned into an unmanageable load through increased interest rates, ever-moving due dates, shortened grace periods, two cycle billing, and other devices intended to increase the profits of the creditors because the creditors have already milked every dime out of the market under the older and saner rules.

I absolutely agree with you: everyone who can opt out should do so.

[flvegan]

3. I fear the defaults we're going to see.

Imagine having a "modest" debt of $10k. You can't afford the payment going from $300/mo to $600/mo, but you can't opt out because your card expires in 8 months and you can't come up with $5k that fast. Nobody's lending at a good rate right now.

Were I CEO of some big lender, I'd make a tender offer (upon reviewing the payment history) to cardholders to transfer to my bank. I'll take consistent PROFIT of 3 or 4% from performing accounts.

Idiots.

[Warpy]

6. I hope it brings a more sensible credit card industry

and stops practices like having kids use them in soda machines(!) and for other small purchases.

High interest, unsecured personal loans should be used as a last resort.

If you've been using the credit card statement as a way of tracking monthly expenses, get Quicken, MS Money, or any of a dozen free progs out there to do the same thing for you, just update it daily. It's cheaper.

[Gormy Cuss]

7. Personal loans --- now there's an old concept.

That was how people with good credit obtained emergency funds. Those "high" interest rates were low compared to some of the rates credit card companies attach these days too.

[Warpy]

4. You'll be ahead of the game if you pay those puppies off

if you run a balance. Otherwise, if you're using them and paying them off monthly, you can assume an acceptable risk of paying usury once in a while.

Just be aware that the window between issuing the bill and receiving payment "on time" will likely close to a bare slit, meaning you'd better get online and pay the balance with your ATM card the second you take it out of the mailbox in the future.

These guys are desperate for assets right now and will do whatever it takes to get them from you.

[AnneD]

5. The best thing I ever did was cut up the cards.....

Did it 5 years ago and haven't missed them.

The trick to weaning off them-save at least 1,000 in an emergency savings account. There has never been a minor emergency I couldn't cover and that kept me from sliding back. I paid them off small to large and will pay the last off in January. I negotiated reduced payouts, lower interest rates-you name it. I will be totally debt free by next year. The burden lifted off your shoulders is unimaginable. So much of your money is siphoned off via interest rate payments. Small wonder we are drowning in debt. They want us to be debt slaves.

My debit card is good for all my needs (car rental, online purchases, etc) and I give myself better interest rates....LIKE ZERO PERCENT.

[TheCoxwain]

8. Citicard bumped me up to 15 percent ...assholes... I have good credit and

no defaults nor late payments ..

I called them up .. and was told this was 'Product' decision and did not pertain to my file ...

I had a small balance that I paid off.