January 21st, 2009
When Bad Interest Happens to Good Customers
Many credit card holders with good credit are living with bad interest rates. The economy what it is, credit card companies are facing hard times, especially getting hit with missing payments and other customer problems. To cope with the times, credit card companies are raising their interest, fees, anything to cover costs. This means that if you were late a single day, or went one dollar over the limit before paying the entire balance down, then you are forced with suffering through high interest as the company tries to keep up.
Dealing with the situation is a multi-step process. First, never be late with a payment on your card, and always pay down the total balance. Even a single day will cost you. Stay below your credit limit as well, as going even a nickel over can hit you with penalties. If you think that you will find yourself in trouble, then call in advance and clear it with the company, as many creditors will grant extensions or temporarily raise your limit to give items a chance to clear.
Read the small print and know exactly what is in your credit card company’s power. Interest rates that are based upon the federal prime are falling, but many cards assign a minimum interest rate. Penalty rates may not follow the prime, so getting a single smudge on your card can cost big. Also learn what fees can be applied if you make a mistake, since cards without annual fees may start having one if you violate the agreement in any way.
If you are hit with a high interest rate, then you should call and find out from your creditor as to why it happened. If you were late, you may be subjected to a period of high rates, which can last for usually half a year. If your history is good, then you can typically negotiate with them to get a lower rate or drop the penalty. Ask how long you are stuck with the penalty if you make no more mistakes. Do not stay with a card who will hold you to a penalty rate for over a year. Make it clear that you will switch as a last resort and they may sway in their position if they truly value your patronage.
Mistakes will happen, and credit card companies want your business, so you will not be hung out to dry. A good credit history will benefit you immensely and will make sure that many places will over you the respect you rightfully deserve. Make sure you compare credit cards and are on one that will not hurt as financially as you old cards should you make a mistake. You may likely find that you are getting a poor deal. Good companies value their customers and will strive to ensure you are satisfied with their product. Find one of these and stick with them, as they will prove to be a valuable asset as well as creditor.
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