Rates going up on credit cards, but you can do something about it!

"Can they do that, mom?" I asked.

She read the policy change to me, and then I remembered the piece of paper I had received the week before from my own credit card. I had thrown it away, thinking it was just another privacy notice. Or was it? Didn't it say something about "change in terms" on the outside of the envelope? Later that night ABC reported that credit card companies all over the nation were raising their rates significantly and that many card holders were clueless.

I made a phone call to the 800 customer service number on my statement, asking them if the interest on my credit card was going to be raised. The answer was yes. They affirmed that I had a great credit score, and that I was never late. Their decision had nothing to do with those factors, but with the economy.

I opted out, which means that the credit card is closed immediately, but that the low interest rate of 8.99% remains the same. I will pay off the remaining balance and can do so monthly or all at once. I can't use the card again, but I refuse to carry a card with a variable and much higher interest rate. I hadn't used the card in a long time, and am paying a balance that has to do with business equipment expenses. This is a workable solution.

I called my mother, who had panicked. As a retiree, they have two credit cards that they use to pay for medication, paying off the cards when appropriate funds arrive. It allows them to have their prescriptions when they need them, but at the nearly 27% rate that was quoted to them, it meant this would no longer work. I asked her to call her credit card company. She also opted out, and her credit card company gave her until December, 2009 to pay off the balance and keep the card active until she found a different solution for their meds.

There is no reason that any of you should have to pay 17% to 30% on cards that were formerly 8 or 9.99%. Make the call. Find your statement. Call the 800 customer service number. Keep your cool. Be tactful, for this is a difficult time to be on the other side of the customer service desk. Opt out, but ask for your options first. One report (linked below) says that closing the account might have negative effects on your credit score, so moving the balance to a low-rate credit company may be a better plan. Check out all your options.

Contact your local credit union. Many offer low balance (pay off each month or $1000 limit) credit cards that you can carry for emergencies or travel. My credit union has not raised their rates, so it will be my card of choice when I travel to speak and for business.

Don't get stuck with unreasonable rates that can hurt you or your family financially. Call your credit card company today!

FOX NEWS ARTICLE: Credit Card Companies Raising Rates on Consumers