Rising Credit Card Rates
POSTED: Thursday, October 22, 2009 - 7:57am
UPDATED: Thursday, June 3, 2010 - 10:58pm
Gina Correa is a woman on a budget, now more than ever. The interest rate on her credit card increased 7 percent. "I have noticed my interest rate has gone up over the last couple of months," said Correa. "I don't know if it's because of a late payment that I did. I don't know."
She is now paying with cash, trying to keep her credit card bills down. "With your interest rate going up, instead of moving forward, you're paying bills from behind," said Correa. "You're kinda stuck!"
Sally Borie with Consumer Credit Counseling Service has seen several clients shocked at their skyrocketing interest rates. One reason is the economy. Credit card companies are trying to squeeze as much money out of customers as they can. Another reason is that companies are scrambling to raise their rates before the Credit Card Accountability, Responsibility and Disclosure Act goes into effect February 2010, which will make it harder for companies to increase their rates.
But, Borie has some advice for credit card customers. "If you have a good relationship with the credit card company, you can call them and ask them to reduce it," said Borie. Another option is to cancel the card, but check your credit score first, since stopping a credit card can be detrimental to your credit score. However, if you are in good standing with the credit card company or often pay your bills on time, it may not hurt your score.
"Pull a credit report, see what it looks like," said Borie. "A credit report looks at a lot of things, not just one or two credit cards.