5 reasons your credit card rate goes
up
By Dana
Dratch • Bankrate.com
Want to know when your credit card issuer can
raise your rates? Read your contract, says Kevin Mukri, spokesman
for the Comptroller of the Currency, which regulates national banks.
Any reason for raising your
APR has to be in the contract. "Banks can't willy-nilly change
the terms," says Mukri. "Banks are required to fulfill
the contract."
The initial contract should be in plain, readable
language, he says. And if the issuer is changing your rates, they
have to tell you when and why, says Mukri. "What we require
is that people receive notification," he says.
If your APR has gone up, here are some likely culprits:
- You were late with a payment.
- You were late with another debt. (But your contract
has to disclose that the issuer can penalize you for your record
with other creditors.)
- Your issuer merged with another entity. "The
receiving bank has the option of changing the conditions [of the
contract]," says Mukri. "But they have to spell it out
to the consumer."
- The bank's cost of borrowing money has increased.
(Has to be in the contract.)
- Any other reason spelled out in the contract.
If your creditor hikes the rate, don't give up. Ask for an explanation,
and try to negotiate a better deal.
Convinced that the company has raised the rates
without cause? The Comptroller of the Currency will investigate.
The hotline is: (800) 613-6743.
Dana Dratch is a freelance writer
based in Atlanta.
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