Are Credit Card Rates Changing?

I’ve recently been reading that credit card companies are changing the rates for some of their cards.  MarketWatch cites one case where someone in the US who claims to keep in good standing on his card recently had his interest rate almost tripled from 5.5% to 14.99%.

He asked why the bank jacked up his rate for what he believes was no apparent reason and was told it was necessary to offset losses from the growing numbers of low-performing or default accounts.

“It was just incredible to me that they would do that like that,” he said. “I said it sounds like they’re spreading the wealth and the rep said, ‘Yep, that’s what’s happening.’”

Welcome to today’s credit-card world, where interest rates and fees can go up, and credit limits and rewards benefits can go down, seemingly at the drop of a hat and with little notice to borrowers — a situation that has consumers fuming and politicians taking notice.

While I haven’t heard of any Canadians experiencing this, it should serve as a good example of why you need to pay off your debts – things can change without any notice.  In the end, your budget can be significantly impacted by these changes, and if you aren’t staying on top of things, no one else will.

Drop me a note if you’ve had your interest rates increased.

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