When you apply for a credit card, the application that you sign is also a legally binding contract laying out all the terms
between you and the bank, such as the interest rate and how its calculated, the grace period, whether there's an annual fee, etc.
While you have to agree to the terms and sign if you want the credit card and while the lender will certainly hold you to the terms, the lender doesn't feel similarly committed.
Lenders like to constantly amend the terms, effectively changing the deal after it was made. This is one of the few industries where you can be charged more than you originally agreed to pay.
One of the main reasons they're doing this is because they are constantly checking your credit score, looking for an excuse to raise rates and thus their income.
So, even if you have never been late on any payment to any bank or utility, your credit score can raise as you're approaching your credit limits. Or you could have missed a payment or lost your job. Lenders have any number of excuses for their actions.
Also the lenders count on the customers not reading the little inserts filled with legal jargon they slip in with your bill or mail separately, at least until it's too late. Apparently the vast major of card holders never look at these amendments. Theu also hope that most of us are ignorant of our credit card rights.
Not all changes to the credit card agreement are necessarily harmful to you, although you'll rarely find one being done in your interest. Most of them change minor terms of the agreement.
But they can contain nasty suprises as well.
The problem the lender has is that the original agreement is a binding contract that the lender can't change unilaterally. They have to give you an out. That's why it pays to pay attention and know your credit card rights.
I once had a credit card account with the stated interest rate of 13.5%. I was financially strapped and was using more and more of my available debt. I had never missed a payment or was late to anybody for at least 10 years.
However, not paying much mind to my statements, I did not know the bank sent me a notice that it would raise my rate if I used the card past a certain date. I did and I found myself facing an interest rate of 24%. Calling the bank and complaining and threatening to take my business elsewhere had no effect.
After that I started to pay more attention to those little slips of paper. Twice more different lenders tried to do the same thing. But I followed the directions on the amendments to the credit agreement and wrote the bank within the time frame given, telling them to cancel my account. You must no longer use the card afterward. If you do, you've accepted the new terms in spite of your letter and you're stuck with them.
If you have any automatic charges being made to the card, including things like credit insurance that the lender itself
sells you, make sure they are cancelled in writing before the cutoff date. One little automatic charge will also constitute an acceptance of the changes in the credit terms. The bottom line is that the lender will consider any little slip in its favor and hit you with the higher rate.
As long as you continue to pay your bill under the terms of the original agreement, the bank can do nothing about it. You can pay off the bill at whatever pace you see fit, as long as you make the minimum payment.
I consider the lenders' actions as akin to kicking you while you're down. Most people wouldn't be using up their available credit unless they were already struggling. My credit card payments went up $46 per month on that card. I saved thousands by refusing to go along with other proposed increases.
The issuer of one of my cards that has carried a zero balance for several years has been periodically raising the rate to where it is about 25%.
Know your credit card rights and fight back. If you've haven't gone completely over the edge yet, you might find a lender willing to work with you.
Chris Cooper is a retired attorney who is very familiar with debt, being in it too many times in his life. These articles pass on some of the knowledge he has gained striving to become debt free. He is editor-in-chief of http://www.credit-yourself.com a website devoted to debt management
If you're a college student, you probably already have a... Read More
Martin Henderson is in a fix these days. Because of... Read More
Using a credit card wisely is an important step in... Read More
There's only one way to discover the "health" of your... Read More
Whether you are aware of it or not, credit bureaus... Read More
Fixing a credit report starts with seeing what's on it.... Read More
Why do some people get offers for pre-approved credit cards... Read More
Obtaining a credit report is an excellent way to begin... Read More
Your credit report is a very powerful report that essential... Read More
Credit card consolidation is a popular solution for those with... Read More
Your credit score can either haunt you or reward you.... Read More
Credit Cards are essential for any consumer today. However, when... Read More
Online car finance is convenient. You can apply over the... Read More
Companies that issue credit cards want to make a profit.... Read More
Your personal credit file is separated from those with the... Read More
Credit cards have both benefits and drawbacks. It is wise... Read More
One of the great mysteries of life is how the... Read More
INTEREST BEWARE, THERE'S SAFETY IN NUMBERS!Note: The following is part... Read More
So you got into debt, had problems but you got... Read More
There are a whole variety of different types of credit... Read More
Consumers today are up to their eyeballs in debt. And... Read More
It's not as hard as you think to raise credit... Read More
Imagine...obtaining credit that's incredibly easy...opening doors of opportunity you never... Read More
Bad credit can be a burden for otherwise good credit.... Read More
Many credit card holders sign up for a credit account... Read More
Legislators in Washington, D.C. are considering several credit-related consumer protections... Read More
In addition to the APR (annual percentage rate) and the... Read More
Did you apply for a personal loan only to be... Read More
Identity theft is the fastest growing crime according to the... Read More
Credit counseling is a free service that many people with... Read More
His hard earned money? Gone. Creditors on his back everyday.... Read More
If you're like the average person, let me warn you... Read More
This summary of the Fair Credit Reporting Act will explain... Read More
FREE credit checks or free credit reports. What are they... Read More
Making Your Credit Rating Work For YouOne of the basics... Read More
There are many different ways to borrow money. Outlined below... Read More
The Credit Report is like your scorecard in the lending... Read More
Credit cards can be a very quick way of getting... Read More
Credit and charge card fraud costs cardholders and issuers hundreds... Read More
The Federal Trade Commission (FTC) has set up a new... Read More
With today's credit card companies, there are many opportunities to... Read More
In industrialized nations, going into debt starts early. It's easy... Read More
Will lenders really love you for having a good credit... Read More
What Is Your Credit Rating Now?If you have any charge... Read More
If you are just entering the world of credit cards,... Read More
As a young student I feared getting bad grades because... Read More
How can I prevent Identity theft from happening to me?... Read More
The Beginning of the Credit Card EraIn 1951, Diners Club... Read More
Thinking of applying for a credit card with a reward... Read More
"Easy Low Down Monthly Payment," "Buy Now Pay Later," "You... Read More
Getting an annual credit report review has been the advice... Read More
Credit score is one of the most basic, determining factor... Read More
Credit score is the key factor determining approval of almost... Read More
Sometimes life lands you in a situation that causes your... Read More
The most important thing for you to remember is that... Read More
Most consumers are aware that they have something known as... Read More
Ah, the sweet rewards of using credit!Not only do you... Read More
How to Repair a Bad Credit Rating?The Right Way!If you... Read More
Here, Cratchet, what do you think you're doing?Uh, er, leaving... Read More
In their quest to get you to sign up for... Read More
His hard earned money? Gone. Creditors on his back everyday.... Read More
One of the focus areas of my information is the... Read More
1. Deleting Errors in 48 HoursThis is the absolute fastest... Read More
One of the biggest problems people have in these modern... Read More
Whether you are aware of it or not, credit bureaus... Read More
Ah, the "good old days". If you are a baby... Read More
Credit |