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Credit changes filling the mail

Credit changes filling the mail

(Credit and Money Matters) Permanent link

If you have credit cards, you’ve probably noticed a lot of mail lately. In addition to your monthly bill, creditors are sending notices about upcoming changes to your account. If you don't like the new terms, your option is to "refuse," which effectively cancels the card. But should you dump a card? It depends ...

The next phase of the new credit card law goes into effect in February. The law offers several benefits to consumers, including banning the concept of universal default, the practice of raising interest rates based on a missed payment with another lender. It also requires companies to give you at least 45 days’ notice before making changes -- which many intend to do. Included in my mail were a number of booklets, mailers, etc. related to changes to my cardholder's agreements. As we’ve warned before on All Consuming, even those with good credit might not be able to avoid a shift from a fixed interest rate to a variable one, higher monthly payments or the imposition of an “inactive fee.”’s “10 Best Credit Card Moves in 2010” offers some good advice for managing your money. Among the tips: Paying down existing balances, spending rewards points before they expire, and avoiding closing accounts unless necessary. That last one might not seem to make sense, but ditching an account with a zero balance will cause a drop in your available credit – which consequentially could alter your debit-to-credit limit ratio and lower your credit score. If you have other credit cards with high spending limits and low balances, that might not be a problem.

When a reporter called Capital One to ask if there were a way for a consumer to avoid a higher interest rate, they were initially told no. But they kept up the pressure and suddenly, the consumer qualified for a "special offer" that allowed her to temporarily keep her interest rate. According to the report, Cap One's public relations person said "decisions to modify terms are made on a case-by-case basis depending on the individual customer's circumstances." If you try to fight back, let me know how it goes.

Chatter: How do you plan to handle your credit in 2010?

Posted by Kristin Alexander All Consuming Blog Moderator at 12/30/2009 05:00:18 PM | 

I think its ridiculous that canceling a credit card still impacts the consumers credit score. Why hasn't this law been changed ?
I also don't understand why lawmakers didn't jump immediately onto the credit card companies response to the pending new law and freeze their ability to institute these outrageous changes in order to get their last bit of blood from consumers.
Pretty neglectful all around.
Posted by: Lisa Jones ( Email ) at 12/31/2009 11:03 AM

tried to fight the changes. I have a credit score of 800 and excellent relationship with y companies but still saw a 10-16% increase in rates over the last few months. The result? Essentially told "too bad" by all the companies and reminded that canceling the cards would damage my credit score. Thankfully I don't run up debt and paid off the little I owed but I can sure see why these changes will further damage consumers already in a financial crunch.
Posted by: Lisa Jones ( Email ) at 12/31/2009 11:06 AM

I looked at my statement for February and saw that Capital One raised my APR 11% and added that to my minimum payment, from $68 to $101. I called and asked to speak to a supervisor right off the bat. I got handed of twice, was hung up on while waiting, called back and actually got a billing supervisor in the U.S. no less. She said I had been informed by mail with my bill that the increases would come after Feb. 28th since last May '09, although they never stated how much higher it would be. Being on a fixed income (Disability) I couldn't afford the increase and told her it was unacceptable and I would not pay the increase. She stated the "only way" to avoid the higher APR was to opt out of the use of the card. I refused the terms and she said I only had the one option. She persisted and I eventually gave in. So I still pay my usual minimum payment and have lost the use of the card. Gee, I think bankruptcy is in my future.
Posted by: Raymond James ( Email ) at 3/2/2010 1:39 AM

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