Consumer Warning – Read Your Credit Card Mail
During 2008, credit card companies have gone out of their way to make life difficult for consumers. They’ve cut off business credit, lowered consumer credit lines, raised interest rates and made it more difficult for even the best consumers to obtain 0% interest rates.
Of the bountiful gifts our beloved credit card companies have bestowed upon us this year, the nastiest is the raising of interest rates on current customers, often for no apparent reason. The method by which credit card companies are notifying consumers of interest rate increases is the mail, a tactic that is helping to pad their bottom lines.
The reason this tactic has proven so effective lay in the fact that we have all become accustomed to tossing credit card mail in the garbage (I personally prefer to shred it). However, regardless of a person’s preferred method of destruction, the standard response to most credit card mail is to dispose of it. Bank’s know this, and they are using it to their advantage by sending out updated disclosures and credit card terms to consumers.
These updated disclosures often include notices to consumers that they have two options: close your credit card account and pay off your balance at the current rate OR do nothing and accept a higher interest rate. Unfortunately, many consumers are accidentally doing nothing because they don’t even bother to review these notices.
The cost of this oversight can be tremendous. A recent visitor wrote in and informed me his interest rate had been increased to 23.99%. And he’d never once been late on a payment. Horror stories like this have become all too common. Please don’t let this happen to you. If you get a notice in the mail, read it and respond. In the long run, this could save you hundreds of dollars in interest. If its already too late and your credit card company has raised your rate, take advantage of a 0% APR balance transfer as soon as you can. This will not only save you money on the higher rate, but also, on the rate you would have paid before.
By all means, however, read and respond to any mail from your bank, especially if it is labeled a NOTICE or mentions a CHANGE IN YOUR AGREEMENT. This is big red flag.
If you have friends or family you think might benefit from this information, be sure to share it with them. It may be the best gift they get all season.
