Credit cards

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When the Federal Reserve meets, we all have questions: What does it mean to me? Is my credit card company going to sock me with another rate increase? Bankrate is here to help. We’ve looked at five categories — mortgages, home equity loans, auto loans, credit cards and certificates of deposit — to determine if the Fed’s moves made you a winner or a loser. Here’s a look at credit cards:

 Winner: Credit card debtors
For the first time since it began its series of rate cuts, the Federal Open Market Committee, or FOMC, decided to leave the federal funds rate, currently at 2 percent, untouched. The prime rate remains 5 percent.

So, for now, you can enjoy the total effect of seven consecutive rate cuts. “Your rate won’t change unless your risk profile as a borrower has changed,” says Keith Leggett, senior economist for the American Bankers Association.

Issuers will continue to monitor borrowers’ credit risk closely and may raise rates accordingly or reduce lines of credit if customers have become riskier borrowers, he says.

Factors that could increase credit risk include missing payments, paying late, charging up high balances and exceeding your credit limit.

Regardless of the Fed’s actions, Curtis Arnold, founder of and author of “How You can Profit from Credit Cards,” expects issuers to raise rates within three months to six months in light of profitability concerns, the credit crunch and the threat of credit card reform bills.

 Take action
Make sure to pay on time and as much as possible, keep balances low and watch out for terms-change notices, advises Bill Hardekopf, CEO of

If you miss a notification of a new due date, for example, it could cause you to pay late by mistake. He says these notices may be sent with your statement or enclosed in a plain envelope that looks like junk mail. Read anything from your issuer carefully.

If your rate rises unfairly, request a decrease from your issuer, and cite competitive offers to make your case. Consider switching to another issuer if yours refuses to lower your rate.