Can Credit Card Companies Raise My Rates For No Reason?
By Kurt O'Keefe, Attorney at Law on Aug 22, 2007 in General Bankruptcy Information
Yes.
They usually have a reason, but it has nothing to do with your use of the card. Now, they are worried about credit in general, and all the bad loans they already made, according to today’s Wall Street Journal.
Raising rates after you increase your balance is particularly insidious. You are in a position where your minimum payment is already higher, and credit card company changes the terms of the agreement so that more, if not all, of the payment will be applied to the new higher interest rate.
Credit card use has been increasing the last two months. It seems consumers are unable to borrow more against their homes, so they have turned to credit cards.
You cannot borrow your way out of a debt problem!
Be wary of increasing your credit card use, you may be caught by higher interest rates imposed by the creditor without you missing a payment or otherwise impairing your credit.
Many people get caught in the cycle of making minimum payments on cards only to see the balances increase month after month. It is a good time to pay off, or at least down, credit card balances.
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