August 21, 2009
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CC Rate-Hiking Trail
Choose the best path.As most credit card holders well-know, credit card rate hikes have become an every-day event. There are many causes and, probably, most of them justified. Credit card lenders are losing money hand-over-foot from defaults, reserve resources are running scant, many of their defacto liberties are soon going away, Because of a collapsing economy, huge segments of the customer base have become more risky, etc.
Face it, the banks are in trouble, too. Many are just trying to survive (many already haven't). They need to find ways to shore up reserves, which they must set aside. So, what does that do for us credit card holders having our rates hiked? Here are, at least, some options that may help:
Ø Negotiate: Almost always, the best place to start is to talk it over. Never hurts to ask. Build a case as you go, why it would benefit the credit card lender to give you one more chance. Very typically, broad segments are blanketed, and the rules are not set in stone. They can be bent, upon request.
Ø Opt Out: Don't place any new charges on the credit card. Just pay it off at the old rate. Only if you place new charges on the card do you have to accept the rate hike.
Ø Shop Around: There may still be some good credit card deals out there if your FICO Score is high enough (above 700). Whatever you do, be leery of false promises over the phone. There are more scams then ever to draw you in with promises that are not kept from deceptive advertising
Ø Manage Your Situation: If you haven't been nailed yet, shorten your neck. You stick your neck out when you carry a large balance from month–to-month. If you must charge $1,000 every month on a $2,000-limit credit card, even if you pay it off each month, it's best to distribute the charge among different cards. Jostling over 33% of a card's max, triggers red flags at the bank and they start to worry about it.Of course, we could go on and on with suggestions but, those mentioned here are the more prevalent in this day's abnormal circumstances. Track changes and trends in the credit card industry and legislation (they're more pronounced then ever as of recent). Stay tuned to this site for news on the latest events as they unfold.