Credit card companies have written the rules so that they can change the terms of their agreement at any time. They mail out a tiny 32-page booklet with minuscule print stating the new terms. Who reads these terms? Most people do not! Most people notice the new terms when their minimum payment doubles or even triples. (Like I did.)

You may have made no changes in your account–no late payments, no missed payments–but suddenly you’ve seen your interest rates leap to rates in the mid to high twenties.

Recently the rate of one of my cards jumped from 9.24% to 24.98%. I called the card company immediately. “If you accept the new terms, then that’s the rate,” said the Customer Service Representative. “There’s nothing we can do about it. Your card has been selected for a change in terms and until the account is reviewed again, that’s the rate.”

“What if I don’t accept the terms?” I asked.

“Then when the card expires, we don’t issue you a new one,” replied the representative.

It was an easy choice. “Then I don’t accept the new terms,” I answered without hesitation.

“Then your account will stay at 9.24%. If you change your mind about accepting the terms, please let us know.”

I was thrilled. I could keep the lower interest rate and, right before the card expired, I could change my mind and say I accepted the new terms (as long as, by then, the terms were reasonable).

Watch your credit card interest rates, especially if you’re carrying a balance. And to keep your interest rates as low as possible, you have several options:

1. Whatever your current interest rate, call the credit company, verify the current APR, and ask for a reduction. If the customer service representative says she cannot give you one, speak to a manager. This used to result in a lower rate quite easily! It works less frequently now, but you can still gather information that can help you. Sometimes the people who work at the credit card companies are as horrified at the new interest rates as the customers. If you don’t find someone helpful, simply call again. Find out your payoff options and find out when the card will be reviewed again.

2. When you receive a booklet with new terms in the mail (it comes with your statement and advertisements) don’t throw it out! Look for the part that announces your new interest rate. Under that, you should find something about your option to not accept the terms. Call the company and take the option!

3. If you think you can’t make the minimum payment, call the company and say you want a payment plan with lower payments. The credit card company may say it would mean closing your account once the card is paid off. That may not be a bad thing for you! How many credit cards does one person need anyway? If your goal is to live debt-free, living without a false sense of dependence on credit cards is certainly moving in the right direction!

Source by Joy Van Hemert

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