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Shop Around for Better Credit Card Rates

by Francine Huff

It's annoying to see your credit card rates jump up for no good reason. But many credit card companies have raised rates ahead of changes aimed at helping consumers. If you've received notice from any credit card companies that your rates are increasing, here are some things you can do to fight back.

Negotiate for Better Credit Card Terms

Yes, card issuers are aggressively raising credit card rates. No, you don't have to take it. After being informed of any changes in credit card terms, your first step should be to call your credit card companies. Let them know you are unhappy with the changes and then make a case why you shouldn't have to pay higher credit card rates. The following things can work in your favor and may persuade your card issuer to offer some kind of deal:

  • You've been a long-time customer
  • You have a solid history of making payments on time
  • You have a low balance on your card

If your credit card company offers a temporary fix, such as six months at the old interest rate, decide whether it makes sense to accept those terms. This type of deal can be useful if you have the means to pay off the balance in full within the time frame. A large balance may be difficult to pay off over a few months, so it may be more advantageous to shop around for a new credit card.

Compare Credit Card Deals

Search for a new credit card offering more favorable terms. Check out credit card rates, fees, and other features. Find out how finance charges are calculated and the length of the statement billing cycle.

Zero interest balance transfer credit card promotions can offer a great interest rate for a period of time, but if you are unable to pay off the card during that time, you get stuck with higher rates later. You also are likely to be charged a balance transfer fee that could be 3% to 5% of the balance.

Scrutinize Credit Card Rewards

Also, decide if you really need a rewards program tied to a credit card. Generally, credit card rates are higher for rewards cards. You also could end up charging more than you intend just to rack up points. Read through the credit card terms very carefully to make sure you understand exactly what's involved with opening a new credit line.

Published 07/14/11 (Modified 07/15/11)

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