12/02/2008

Credit Cards Changing Terms and Interest Rates

Watch your mail very carefully for information sent by your credit cards. Not only are many (AMEX, Citibank, Wells Fargo to name a few that I have personal knowledge of) reducing your overall credit limits but they are beginning to aggressively circumvent your use of credit by changing the terms.

I just got a letter from Citibank giving me the right to opt out of new terms on my existing credit card. The interest rate will go from 14% to 24.99% and can go as high as 29.99% for any new purchases after tomorrow. If I don't agree to that change in terms then I can continue with the current rate on the existing balance (as long as I don't miss a payment or am late with a payment) until the end of the card membership year or the expiration date on the card, whichever is later. At that poing the account will be closed, making any balance remaining payable under the new, higher interest rate.

Thankfully I just had a new card issued with an expiration date of mid-2011 - so I have until then to whittle away at the balance. Others may not be so lucky. You could find your card is expiring soon in which case you'll be paying exhorbitant interest rates.

Don't overlook these letters...I have a feeling we'll be seeing lots more of them being sent out.

1 comment:

James E. Becker said...

Wow, that's interesting information, Mary. Nothing surprises me about credit card companies, especially since Amex decided they were entitled they were entitled to a share of the bailout money. Great post, thanks!