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Credit Cards - Rate Changes and Cancellation - The Bills.com Blog
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Credit Cards - Rate Changes and Cancellation
Tuesday, Jul 21, 2009
Question: Can a credit card company change your fixed rate to a varibile rate, even though that is not what I sign up for in the beginning? (2) Can a credit card cancel you because you don't use the card?
Answer: Unfortunately, not only can credit card companies change your interest rates, lower your limit, or cancel your account altogether, there is currently little recourse available to consumers who fall victim to these practices. A credit card bank has the right to charge you basically whatever interest rate it wishes to charge. The fact of the matter is that many credit card companies are always looking ways to increase profits, and astronomical interest rates, combined with numerous late payment and over-limit fees, allow banks to clear huge profits (well into the tens of billions of dollars annually, for many of the country’s largest credit card issuers) on their credit card businesses.(A quick side note: Recently, consumer backlash against these practices has caused the federal government to consider enacting new laws that would limit and/or eliminate many of these practices. If you're interested in learning more about this proposed legislation and how to support credit card reform, visit this link .
As for you current situation, the definitive way to prevent you credit card company from continuing to charge an interest you are unhappy with is to pay
off the balance of your account. If you cannot afford to pay off the balance of the debt, you may want to consider transferring the balance on this high-interest credit card to lower interest cards. Many credit card companies offer a 0% interest rate on balance transfers , so if your credit is good enough, a balance transfer may help you significantly lower the effective interest rate on your debt. You could also look into taking out a personal loan to pay off this account; the amount of the personal loan you can obtain and the interest rate you will be charged will largely depend on your credit rating. A good source for personal loans at a competitive interest rate is www.Prosper.com, a peer-to-peer lending network designed to facilitate lending outside of the traditional banking system.
If one of the options I mentioned above does not help you in reducing your interest rate, you may want to consider other options available to consumers struggling with debt, such
If one of the options I mentioned above does not help you in reducing your interest rate, you may want to consider other options available to consumers struggling with debt, such
as debt settlement/negotiation services, credit counseling, and possibly even bankruptcy. For more information about the various debt relief options, I encourage you to visit our debt help . If you submit your contact information in the Bills.com Savings Center, a Bills.com pre-screened debt relief professional will contact you to discuss the options available to you.
I know how unfair it seems that credit card banks can increase your interest rate. However, as I mentioned, they are allowed to make these changes under current credit laws, and they will almost always take advantage of this ability to increase their profit margins. Hopefully, some of the information I have provided will help you find a way to restructure your debt to avoid paying an astronomical interest rate.
I wish you the best of luck in finding a solution to this problem, and hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com/blog/
I know how unfair it seems that credit card banks can increase your interest rate. However, as I mentioned, they are allowed to make these changes under current credit laws, and they will almost always take advantage of this ability to increase their profit margins. Hopefully, some of the information I have provided will help you find a way to restructure your debt to avoid paying an astronomical interest rate.
I wish you the best of luck in finding a solution to this problem, and hope that the information I have provided helps you Find. Learn. Save.
Best,
Bill
www.bills.com/blog/
Also, make sure to get a free financial health check-up with Bills IQ!
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