Watch Your Credit Card Statements!

It is more important than ever to pay attention to your credit card statments and any correspondence from your credit card companies. Because of new laws affecting credit cards (look for my previous blog post) the banks are getting very aggressive with consumer and business credit card accounts.

Consider this article -

One-Third of Credit Card Holders' Limits Cut

"Credit card companies reduced limits for 58 million cardholders w/ little regard to their credit scores" http://bit.ly/JB2y9


And from American Banker yesterday (a subscription publication):

"Credit card lines nationwide are set to be cut by another $1.5 trillion before the economy bottoms, on top of a $1.2 trillion cut from the peak, the analyst Meredith Whitney predicted Monday.

Unless credit loosens up dramatically for Main Street, small businesses will stymie a recovery, she wrote in a report to clients.

Credit cards are a particular source of concern, as roughly four out of five use them as vital portion of their overall funding, Whitney wrote."

So watch your personal and business credit card statements and correspondence and don't be blind-sided by increasing interest rates, reduction of credit lines or cancellation of accounts and the worst, in my opinion, the increase of the minimum payment percentage.

Chase Upping Minimum Payments on Credit Cards

If you haven't had some credit card limits reduced or interest rates increased you're in the minority. But now the credit card companies (at least Chase Bank credit cards) have a new tactic.

It happened to me last month and to a friend this month. Now they are raising the minimum payment - mine went from 2% to 5% and since this is a card with one of those (long gone!) "2.9% interest until paid off" deals I long ago max'd it out by transferring higher balance cards to it. But now the minimum payment almost tripled!

Exactly the same thing happened to my friend, and they are both Chase issued credit cards. Interestingly they are reacting to objections differently...I was offered a 5-year payoff at my existing interest rate if I closed the account but my friend was not given that option.

A new law was passed regarding what a credit card company can and can't do, but a lot of the rules don't take effect until 2010 - so you can bet they will try to make whatever changes they can to your accounts before then. Click here for information: Credit Card Legislation

So read all of those pesky "Change in Terms" inserts or mailings from your credit cards and don't be taken off-guard.