Credit Card Clauses Can Create Rate Hikes, For You!
September 20, 2006
If you have a credit card you will want to hear this scary story. Most people are unaware of a clause that can let credit card companies raise your interest rates and it is legal as one adult teen found out.
Vicky Gillespie pays her bills on time and was shocked to one day find that her credit card company had risen her rates from 13.3 percent to well over 21 percent. While she was still reeling from that shocker, her next statement gave her another hit. The rates went from over 21 percent to 31.5 percent after she cancelled the card.
It turns out that she had forgotten to pay her car payment and it was now 30 days later. It didn’t help that the check she sent in was bounced back because she accidentally filled it out wrong.
The problem arose due to the fact that her credit score went down because of the late payment. Even though the car payment was not paid with her credit card, the company was still allowed to raise her fees even though she had never sent them a late fee.
So simply put, they can make extra money off of you if you are late with rent, car payments, utility bills, etc. I don’t think businesses think about the long run. Sure they can legally raise her fees because of this even though she has shown them she is a good customer. But by doing that they have lost her as a customer probably forever and more than likely any other person this is done too.
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