Happy Monday, everyone! In addition to “Fun Friday”, we’ll now have “Monday Madness Matters”, and the matter at hand will change each Monday.
Today, we’ll answer a question I received from one of our Facebook Friends. The question was, “How can the credit card companies raise my interest rate if I’ve paid my bills on time?” Great question, and this may have a lot of you raising an eyebrow.
Credit cards have a ton of fine print, and let’s be honest, most of us don’t read it start to finish. We think that as long as the payments are made on time, the interest rates should stay the same. Unfortunately, there’s more to it, It used to be that credit card issuers could raise your rate, even on existing balances, at any time and for any reason. The Credit CARD Act, a federal law, put an end to this. They can, however, raise your rate on your outstanding balance if you are more than 60 days late with a payment and they can increase the interest rate on new purchases. But they are required to give you 45 days advance notice for you to cancel your account f you choose.
If you’ve noticed that your rates went up, or if you have been notified that the interest rates will go up, there are a couple of things you can do. First, call them, ask for a better rate in order for them to keep your business, the worst they can do is say no, right? Another option is to put the balance on a lower interest rate card.
Please note: If you are trying to increase your credit, the second option is not recommended if you don’t already have the card, or if the balance you need to transfer is more than 30% of the limit.
Hope everyone has a great week!! Keep the questions coming!