Your Debt Threat

At a time when banks are losing money due to toxic assets, they are dropping the hammer on the already pressured consumer. The credit card divisions of the major banks in the US are trying to make up for loan losses by increasing credit card interest rates. Banks are raising rates on customers regardless of payment history. Customers that pay on time have seen their credit card rates go up as much as 5% annually.

I find this behavior totally unjust. They should not be punishing customers who pay their bill to cover losses from customers who do not. This is a terrible business practice. So what can you do about it? 

1. Stop using the card immediately. You don’t want to have future charges at the higher interest rate.

2. Write a letter. State your displeasure with the higher rate and request a lower rate. I used to call but calling can be a hassle. I found myself transferred to different customer service reps each time who knew nothing about my case. I write a letter when I have a complaint so that there is written documentation on file. I have gotten better results by writing a letter.

3. Be prepared to leave. A lot of people threaten to leave their credit card company but do not follow through on it. If your credit card company refuses to lower your interest rate, it may be best to leave. They obviously do not value your business and you would do better to go elsewhere. Most credible companies hate to lose a loyal paying customer.

4. Transfer your outstanding balance. If you have a solid payment history and decent credit score you will find a better rate. Check out websites such as bankrate.com. They offer lists of credit card companies nationwide and their current interest rates.

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