Protections against Random Interest Rate Increases
Paying off your credit card balance is hard enough as it is. A random interest rate hike on your credit card balance makes paying off your credit card debt a heck of a lot harder. Historically, credit card companies and banks had the freedom to raise your credit card interest rate without 'expressed written consent'. In other words, the purchase of your new clothes now just got a little more expensive.
Some of you have fixed interest rate credit cards, while some of the others have variable interest rate credit cards. Regardless of what type of credit card you have, we can all agree that a random interest rate increase is far from helpful. Congress also agreed that random interest rate hikes are far from helpful because the new credit card legislation was passed with bipartisan support.
Here's what you should remember about interest rate increases:
a. The credit card bill now requires credit card companies to give cardholders 45 days notice before increasing interest rates.
b. You have 3 billing cycles after the rate increase to agree or disagree with the new terms.
c. Lastly, cardholders now have the right to cancel their card and pay off their existing balance at the current interest rate if the bank or credit card
company wants to raise your interest rate.
All these new and old rules can be confusing to the average consumer. For too long, many of the banks and credit card companies hoped we weren't paying attention. These new laws are set to protect the consumer and with a little effort on our part we can grab a hold of our financial battleship. We're finishing the blog series on new credit card bill in the next post.
As always, please email me with any questions or comments.
Ebong Eka, CPA
info@ebongeka.com
Paying off your credit card balance is hard enough as it is. A random interest rate hike on your credit card balance makes paying off your credit card debt a heck of a lot harder. Historically, credit card companies and banks had the freedom to raise your credit card interest rate without 'expressed written consent'. In other words, the purchase of your new clothes now just got a little more expensive.
Some of you have fixed interest rate credit cards, while some of the others have variable interest rate credit cards. Regardless of what type of credit card you have, we can all agree that a random interest rate increase is far from helpful. Congress also agreed that random interest rate hikes are far from helpful because the new credit card legislation was passed with bipartisan support.
Here's what you should remember about interest rate increases:
a. The credit card bill now requires credit card companies to give cardholders 45 days notice before increasing interest rates.
b. You have 3 billing cycles after the rate increase to agree or disagree with the new terms.
c. Lastly, cardholders now have the right to cancel their card and pay off their existing balance at the current interest rate if the bank or credit card
company wants to raise your interest rate.
All these new and old rules can be confusing to the average consumer. For too long, many of the banks and credit card companies hoped we weren't paying attention. These new laws are set to protect the consumer and with a little effort on our part we can grab a hold of our financial battleship. We're finishing the blog series on new credit card bill in the next post.
As always, please email me with any questions or comments.
Ebong Eka, CPA
info@ebongeka.com
