At the moment, seeing your credit card interest rates rise could be the worst possible thing. Unfortunately, this is exactly what is going to happen to millions of credit cardholders. In fact, it has already begun. If you are one of the credit cardholders who carry a balance on your credit card and your current interest rate is below 10%, you may soon see your credit card interest rates jump to double figures.
Major credit card companies American Express, Citibank, HSBC, Capital One and Bank of America have been raising the interest rates of credit cardholders numbering in the millions, citing the difficulties of the economy as their reason for doing so. The increase may affect around four million credit cardholders in the U.S., the Wall Street Journal says. So what can you do to save yourself from the devastating effects of these enormous interest rate hikes?
When you find out that your interest rate is being increased, you should contact your credit card company immediately. This is especially true for those who have maintained their balances to low levels. It is possible that your interest rate may have been hiked by mistake. Credit card companies are generally only targeting those with balances on their credit cards. Even if you have a balance on your credit card, you should still try to talk to your credit card company to exempt you from the hike. Credit card companies have been known to issue exemptions in the interest of keeping their customers.
If it happens that you can't get out of the hike and you just can't accept it, you can still choose to pay off your current balances using your current interest rates. Just make sure that you don't make any new purchases. If you do, the credit card company will automatically move you to the higher rate.
Although most major credit card companies are raising interest rates, there are still other credit card companies who are offering decent rates. You should therefore shop around and see if you can find a good card for you. You might be able to move your current balance to a 0% introductory interest rate card. If you do, make sure to pay it off immediately. Missing out on one payment could mean an even higher interest rate for you to deal with. In the current economic climate, paying off any debts as soon as possible is paramount. Therefore, manage your finances as well as you can and try to avoid credit card purchases for now.