Credit Card Review Blog

The Credit Card Rate Increase

The Credit Card Rate Increase

Do you have good credit? Is your credit report absolutely perfect with no missed or late payments? Do you feel like the only way to increase your credit score is to get older because you are just “that good” at money management and bill payment? If your answer is yes, you still might be caught in a very scary credit trap.

Do not, for any circumstance, throw notices away from your credit card company, especially in today’s market. These notices might be a costly mistake during the credit crunch. People with good credit around the country have begun to get some scary news. Due to the economy and the credit crunch, credit card companies have been forced to increase interest rates. Don’t think your rates won’t be affected just because you have a high credit score and an impeccable credit report.

We aren’t just talking about a small 7.99% to 9.99% increase. One man from New York was shocked to see his interest rate jump from 7.99% to 26%. This man hadn’t done anything wrong and had great credit. In fact, he had never missed a payment or made a late payment.

Bank of America, Citi and Capital One have also stated that “market conditions” could cause an increase in APR’s. These are major credit card companies that have been forced to take drastic measures because of the credit crisis. It probably won’t be too long until we begin to see smaller credit card companies making the same, if not more drastic, changes.

Interest rates are usually increased because of constant delinquency or high risk accounts. Unfortunately, this is not the case anymore. Everyday people who pay their bills on time are being penalized due to certain “market conditions.”

We, as a people, absolutely need to move away from depending solely on credit cards and other credit accounts. There needs to be more money in savings and less balances on credit cards. Unless the economy gets better, we are going to see more and more changes that hurt American citizens and help major credit card companies.