If you carry a balance on your credit card you should be prepared for an increase in your interest rate in the coming months. Recently, American Express, Citigroup and JP Morgan Chase have announced increased interest rates and, earlier this month, Bank of America announced that it was raising interest rates for four million cardholders who carry a balance.
In the case of Bank of America, the Wall Street Journal reports that cardholders who currently carry a balance and have an interest rate in the single digits will likely see rates rise to 10% or higher in June. One cardholder who had a 7.9% rate saw her rate increase to 13%.
New rules approved in December of last year restrict the ability of card issuers to raise rates but those rules don't come into effect until July of next year. In the meantime, what are your options if this happens to you? You can always try to get another card with a lower interest rate and move your balance to the new card. However, qualifying for a new card might be difficult for some and those 0% rates that used to be so plentiful seem to have disappeared overnight. If you can't move your balance to a card with a lower rate, call your credit card company and ask if there is some room to negotiate the rate. In one instance, cardholders were allowed to keep their lower promotional rate if they agreed to pay 5% of the balance as a minimum payment instead of the regular 2%. Also, in many cases, you are allowed to keep your original rate as long as you don't charge anything new to the account.
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