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| The Basics | Why your credit card rate just went up
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Some banks are willing to reduce the higher rates if cardholders credit histories improve, although not always to the original rate.
Opt out, lose the card
In many cases, the first time consumers learn of a rate increase is when they open their statements, because advance notice isnt required. Several large banks such as Citibank, Chase and MBNA have announced their intentions to give cardholders advance notice of such interest-rate increases and allow cardholders to opt out of paying them. However, when consumers decline to accept the change, they lose use of the card.
Its nice to get a warning, said Sherry, who coordinated the survey, but for many folks, there is nothing they can do with the heads-up. They cant afford to pay off the balance, and to transfer the balance to another credit card, they need a clean credit record.
Sherry noted that people who reject the change of terms lose the use of their card, immediately or at the end of the expiration period, depending on the bank. The opt-out protects you from the higher interest rate, but its unfair in any case to raise the interest rate on an existing balance.
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