Credit card interest rates are notorious for being higher than almost any other loan rates on the market. If you are a good customer that pays on time every month and pays your balance down, you would think that your already elevated interest rate should remain stable. This is not always the case.
Credit card companies can still raise the interest rates on your balance if your credit rating has dropped due to credit snags elsewhere. Bank card issuers can raise the interest rates by a sizable degree over the amount initially agreed upon.
Congress is looking at this type of credit card business as unfair practices for customers that are paying on time. This is to be differentiated from the offers of a low introductory rate or if the cardholder violates the initial agreement with the bank card issuer.
For consumers trying to work their way out of debt, the ballooning and unexpected increase on the interest rate makes becoming debt free or at least getting their debt more manageable an impossible feat. Consumers that find their interest rates hiked are urged to contact the credit card issuer and negotiate repayment options.
The credit card industry counters that they have notified consumers in these situations of interest rate hikes and give them the chance to either opt out or contact the credit bureaus. Credit card company executives insist that they, as lenders, must consider consumer risk profiles when considering interest rates.
The plan by the Federal Reserve is to require 45 days notice to the customer before raising interest rates and more clarity in information about fees charged by the credit card companies.
Watch your bills and statements closely for any alterations in terms and conditions, especially for finance charges and interest rates.