With financial institutions finding it harder and harder to lend money at low interest rates, credit card companies are being forced to do things that they would have never even dreamed about in the past. Due to the economic meltdown, the financial institutions have been forced to add new terms to credit cards to help to reduce the amount of risks that the company is being exposed to.
Some of the major methods that the credit card companies are using to help to regain a hold on the credit card industry include the following:
- Increasing card holders monthly payments from 2% to 3% or more.
- Decreasing the amount of available credit for users
- Attaching new ‘service charges’ to the cards.
- Raise interest rates on the card.
Recently, credit card reforms have been passed; however, these reforms will not be effective until the summer of 2010. The best way to protect yourself against these extreme credit card changes is by paying down or paying off your credit card balances. Do this and you won’t be affected by these new dramatci changes.
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#1 by John on January 31, 2009 - 11:26 am
When a credit card company offers you a no-fee offer of 3.9% interest until the balance is paid in full, and then changes it on a whim to either: add a $10/mo fee or switch your rate to 7.99% they are effectively reneging on their promise. The $10 month fee raises your rate, even if they say it’s not a “rate” change. Or you could look at it like they changed “No Annual Fee” to “$120 Annual Fee” – in which case no-one would have take the offer. This is immoral at a time when we are bailing the banks out. They should be taking the free or low interest gifts that we are giving them and offer more credit at 1-2%. But they are out to gouge the consumer and break their word when it suits them. These people are as immoral as Enron.