Multiple banks have increased fees and interest rates on their credit cards – again! As we all remember, the first wave of across-the-board interest rate increases swamped the credit card market around one year ago. Many customers noticed these painful changes back then. What happened then is that banks have re-evaluated their lending policies that led to interest hikes for the customers. For most it came as a surprise, because the majority of borrowers, in their own words “did nothing wrong”, except that generally the interest hikes were applied to the people with slightly less than perfect credit scores. Now, one year later, the trend is back, but this time some banks are increasing interest rates for all their customers, regardless of their credit standing. That customer could be you.

It is easy to miss the changes, because sometimes important disclosures are mailed together with bills. To always stay on top of the game, especially in these tough economic times, we recommend calling your credit card issuers and inquire about your interest rate and fees. Perhaps, now it is the best time to make that call.



If you spot a card that has increased your interest rate, and its rate is substantially higher than for your other cards, you can, and you should fight that. Here are the techniques.

1) Know your credit score. If your credit score is high, it makes you a customer a bank cannot afford to lose. Having a high credit score improves your chances to get a lower interest rate, if not with your current credit card issuer, then perhaps with another bank.

2) Know the limits. “Cheap” credit is no longer available. An interest rate that is lower than 12% is hard to get. But if your bank charges you a whopping 16% or more, and you have a reasonably good credit history, it is worth searching for a better deal.

3) Negotiate, negotiate, negotiate. Remember that asking to lower your interest rate cannot hurt your financial standing at all. Sure, it is not pleasant to talk about missed payments and high balances with a customer service rep, but the reward could be very positive. 



4) Consider closing the account. This is especially helpful if your credit score is high. Mention to your current credit card issuer that you could get a better offer from another bank. If the issue is not resolved to your satisfaction, get a card with a better rate and cancel the old card. 

5) Don’t get intimidated. Often, service reps claim that your credit score will suffer if you were to close an account with them. In reality, this is rarely the case. Generally, if you get approved for a similar credit line with another bank, with a lower interest, it will not hurt you to close ONE card with a high interest. That said, we do not recommend canceling more than one card in 3-4 months. Also, we do not recommend closing the OLDEST of your credit cards.

6) For best results, consider your financial stability the way it appears to lenders. An honest assessment of your value as a credit consumer could save you time and money.

Always, always stay on top of the game. 

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