Short term interest rates have dropped by 2.5% since last Fall thanks mostly to the Federal Reserve Bank pushing its discount rate down to some of its lowest numbers in history. Although at 3.25% the discount rate is above the all time low of 1.00% reached in 2004, the result should be much lower consumer rates across the board.

Except when it comes to credit cards.

Curiously to many consumers, credit card rates haven’t dropped as fast as some would have hoped. Instead, some cardholders have been rudely awakened and are now paying rates that are higher than ever before.

Credit Card Rates Increase

Bankrate.com, one website that tracks this sort of information has said that credit card interest rates have decreased by about 1.4% since last October. On the other hand, some issuers have hiked up their rates to the chagrin of cardholders.

Reasons For The Uptick

There are several reasons why consumers are paying more for their credit cards when they should be paying less including:

• Some cardholders had promotional or introductory rates. When the promotional period ended, the new higher rate kicked in.

• Banks are worried about their mortgage losses and see credit cards as one way to bring in money. If you don’t carry monthly balances, then credit card interest rate changes have no impact on you.

• You were late…with something. You’ve been paying your credit card statements on time, but you’ve been late with a utility bill, car payment, or some other consumer invoice. Guess what? Creditors share this information with each other. Your credit card company is looking for any excuse to jack up your rate and they found one.

If you are dissatisfied with your credit card, call the issuer and ask for a lower rate. If you do not receive a lower rate, consider shopping around for a new card.

Time To Switch Credit Cards?

If your credit is good or excellent, then getting a new card shouldn’t be difficult for you. However, if your credit is fair or poor, then a new credit card can cost you more in interest rates and other fees. In this case it would be better to simply not use your current card(s), and work diligently to pay off your debt.

Resources

Manage Credit Card Use

Smart Money Tips

Time for a New Card

Tags: charge card, credit card statement, Credit Cards, debit card

Scam artists may not be the only ones pulling a fast one on you.

Have you checked your credit card statements lately? No, I don’t mean the amount that you must pay this month, rather have you taken a close look at everything listed on that statement?

You probably are consistently verifying every purchase that appears before making a payment, but you shouldn’t stop there. Scam artist activity is easy to spot, but they aren’t the only ones who could be pulling a fast one on you. Yes, your credit card provider could be up to some mischief, actions which are legal, but can cost you dearly if you aren’t on your toes.

Please read on for some tips on what to watch when reviewing your monthly credit card statement:

Payment Due Date: If payments are due on the 15th of the month, be warned — that date could suddenly change. Even a three or four day shift forward could cause your next payment to be late, resulting in a late charge and a reset to a default interest rate.

Change In Interest Rate: A late payment can push your rate higher, but your interest rate can climb for no reason too. Within the fine print of your credit card agreement you may discover a clause allowing the credit card issuer to jack up your rate at any time. Also, that 0% intro rate had to come to an end at some time — it may or may not stay in effect until your previous balance has been paid off.

New Mailing Address: If you make credit card payments through your bank, then your financial institution will usually keep track of address changes for you. If you make payments on your own, that local mailing address could suddenly be switched to a new address several states away. Yes, the post office will forward your mail, but your payment will be late, resulting in a late charge to your account.

Bye, Bye Points: Who doesn’t like earning points that can be redeemed for cash or other prizes? Be careful, as reward points will often expire, sometimes before you can redeem them.

Change In Contract: Other changes to your credit card account will suddenly show up when you receive a special notice from your credit card provider which might include a new member agreement. You would do well to examine the paperwork closely as annual fees could now be included and a new rate could kick in.

Clearly, credit card providers aren’t looking out for your best interests as they’re in business to make money. Not every issuer is out to get you, but some seem to be looking for different ways to charge you more. By keeping close watch on your credit card statements, you can avoid nasty surprises later on.

Further Reading

Guide to Reading Your Monthly Statement

Prevent ID Theft

Time For a New Credit Card

Your Monthly Credit Card Payments May Double

Tags: charge card, credit card statement, Credit Cards, debit card