With the Fed cutting interest rates, shouldn’t credit card companies do the same?
The Fed has cut the interest rate numerous times now to help the struggling economy. Since a lot of the problems people are having are with debt, mainly credit cards, shouldn’t the credit card companies be lowering their interest rates too? And why is it ok for them to up my interest rate and not notify me? Any advice?
In a perfect and fair world…the answer is “yes.” Yet, they are out for every penny they can squeeze out of cardholders…..Example, I have a FICO of 782 and WAMU is charging me 17.99%…Note: I will soon remedy this situation…
the increase in your interest rate was likely included in the agreement in the form of
“if this happens, then we will charge N% interest”
this happened, so you were warned already.
***
short term interest rates are down all of 1.5% or so — that isn’t going to help you much — and, from the credit card company’s viewpoint, it just about covers their added costs due to higher chargeoffs, so NO reduction for you.
If you have EVER been 1 day late they can up your rate with no notice. You signed that agreement when you applied. It was the “small print”. Call your card holders and ask for a reduction- they will reduce your rate if you have been on time forever with them. They don’t generally do it unless you are smart enough to ask. But if you have been late they won’t.
Also you can tell them that you have an offer for balance transfer at a better rate- they want to keep their good business so they will offer to reduce rate. (Again- if your history is good with them).
Good luck
Some credit card companies have done just that. (My interest rate went down a couple of weeks ago from 10.25 percent to 9.0 percent — this is just one of many reasons I think credit unions are *far* preferable to banks.)
People don’t get into trouble because interest rates are too high — they get into trouble because they don’t stop to think about how much debt they can afford, but instead go out and charge anything they want to have, assuming that the money to pay their bills will just magically show up somewhere. Lower interest rates wouldn’t help much for people who have that kind of attitude.
As far as whether your credit card company can raise their interest rates and not notify you — I’ll bet if you read the teeny-tiny print in the agreement they sent you when you got your card, it says somewhere that they can do exactly that. They make their profits by assuming people won’t read that fine print, or if they do they’ll ignore it or cross their fingers and hope it won’t happen.