Watch out for changes to your credit card terms

Yesterday, I got a letter from Citibank outlining changes to my credit card terms. I just about had a heart attack. Citibank wanted to change my interest rate to the LIBOR average (a rate banks use to lend money to each other) plus 21.99%. The new minimum rate on the card would be 24.99%. That’s more than double my current rate!

At the bottom of the letter, there was a statement that you could opt out of the new terms. I called the credit card company to inquire about these new terms. I was told there was nothing they could do, but I could opt out of the new terms. If I did that, I could continue using the card under my current rates but when my card expired, they would close my account. I told them to feel free to cancel my account.

This change completely blows my mind. I have good credit, have never missed a payment and I have been a cardholder for eight years. Make sure you look at every piece of mail from your credit card companies. If you receive a letter like this, call immediately. If you call after the opt out date, you’ll be stuck with the new rate. Also, check your statement each month to make sure your credit card company isn’t raising your rate. If you do see your rate increase, call and inquire immediately.

This is a rough credit market and the credit card companies are struggling. Don’t let them take advantage of you. Be proactive with your credit card companies.

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