Credit card companies 'reward' customers with higher rates
The credit card industry is trying to boost revenue as the tough economy leads to rising default rates, and once-loyal customers are also being made to foot the bill.
Posted — UpdatedIt is not just happening to people with late payments or large balances. Up-to-date paying customers are being hit with interest rate hikes, too.
The credit card industry is trying to boost revenue as the tough economy leads to rising default rates, and once-loyal customers are also being made to foot the bill.
A WRAL.com GOLO member says he recently received a notice his credit limit was "slashed by 33 percent." Another user found out his limit was cut the hard way, when he tried to use his card and was "informed it was declined." Yet another user says his Chase credit card "jumped from 14 to 24 percent interest."
“It's kind of changing the rules in the middle of the game,” O'Connell said.
“Get the cards out of your wallet. Don't use them,” O'Connell said.
Under new federal rules, companies will only be able to raise interest rates on new cards and future purchases, not on current balances. They also will have to give customers 45 days' notice before changing the terms of an account.
The downside is that the rules don't take effect until July of next year.
O'Connell also said that if you have a reward credit card, use the points as soon as possible because many of those programs could go by the wayside.
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