Credit card rules changed with the Credit Card Accountability Responsibility and Disclosure Act of 2009, and the most significant changes did not take effect until 2010. With the new rules, credit card companies must give a 45-day notice prior to raising interest rates. This provides an opportunity for you, the consumer, to decide how to proceed with the new interest rate facing you. You may want to freeze the interest rate on a credit card, but this action comes with consequences.
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Read all correspondence you receive from a credit card company; it often contains information about changes in your interest rate or the terms, both of which will affect your payment. These are notices required by law and are written to appear to be in your favour when in actuality they are written in the most favourable light for the credit card company.
Read the information carefully, as the Federal Deposit Insurance Corporation (FDIC) reports that credit card companies must give additional notice regarding a right to cancel. "In that same notice, card issuers must inform consumers of their right to cancel their card before the rate increase or account changes take effect," the FDIC says. "Consumers who decide to cancel their card will repay at the "old" (lower) rate, and they cannot be required to immediately repay the outstanding balance." Cancellation of the card is a sure way to freeze the interest rate.
Contact the credit card company at the number on the back of the card and ask questions about the change notice you received. Ask about freezing the interest rate on the credit card, and specifically ask about the effect this step would have on your card or your credit. Some companies will freeze the interest rate but cancel the card or not allow future purchases. Also keep in mind that a new rate will apply only to new charges, not the existing balance.
Make a request by telephone or in writing that the interest rate remain the same for a certain and reasonable period of time -- say, six months to a year. If they deny your request, call and ask to speak with a manager or supervisor and inquire about the retention department, whose responsibility is to keep existing accounts.
Do not make additional charges to the credit card if the company does not freeze the interest rate at your request. This has the effect of freezing the interest on the old balance while still allowing use of the card in an emergency. It does not affect your credit so long as you are paying the balance. It also may work to your advantage as credit card companies send special offers if a card not used for a certain period of time.
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