Credit card companies need to make money just like everyone else. If they couldn’t make money by extending credit, they wouldn’t be in business, and that would force us to pay cash for everything from coffee to vacations. There is obviously a place for credit cards in our society. However, some tricks that credit card companies use to make money can only by classified as sneaky.
This is the second in a four-part series on the hidden cost of credit cards.
Raised interest rates
That sneaky little fine print in the dozens of communications you receive from your credit vendor can contain a hike in interest rates. By law, credit card companies have to make you aware of changes to your account, including changes in interest rate. Unfortunately, there’s no legislation governing font size. Even if you need a microscope to read it, as long as your vendor notifies you of the interest rate hike, you’re stuck. Check that billing statement again to make sure your rate hasn’t risen while you weren’t looking. If you don’t carry a balance on the card month to month, it doesn’t really matter; you’re not paying interest anyway.
If you do have a balance and you find that the interest rate has gone up, it’s worth a call to the company. Although you can’t just decide not to pay interest, you CAN decide to move your account to a different vendor. Remember, for every customer who calls the service line to request a decrease, there are hundreds who just let it go. The credit card company is still making out like a bandit on the interest rate hike, and so are willing to make the occasional exception. It’s in the company’s best interest to keep its customers happy. Customer service reps are often able to lower the rate for you again. If they say they can’t do it, ask to talk to a supervisor. He or she is paid to resolve complaints—so complain!