7 TIPS for Handling Hiked Credit Card Fees

As if there’s not enough financial turmoil right now, we’ve found that millions of Americans are getting bad news in the mail — their credit card interest rates are skyrocketing. In some cases interest rates are increasing from 6.9% to 24.99%. It’s a financial bombshell, and customers are incensed. Why is it happening? What can you do if you get hit? We’ve got the scoop straight from the experts.

1. I’ve played by the rules and have been a perfect customer! I don’t get it.

We’ve been inundated with viewer complaints saying the same thing. People who have never been late, never missed a payment and never went over the limit getting hit with huge rate hikes. In the past, such a stellar track record would insulate you from such increases…but not anymore.

2. I called the bank and they said the poor economy caused my rate hike.
Yes, the tanking economy could be one of the reasons your rate is going up. Federal officials told us that bank money is tight and the situation is getting worse. They’re worried you’ll use too much credit, overspend beyond your means, and then not pay them back.

3. Can they do that? 
Sigh. Yes. Unfortunately. The fine print of those pamphlets you get, but probably don’t read, spells out the bad news. They say things like: “APR’S may increase.” “All of your APR’S may increase.”  And even, “We reserve the right to change the terms at any time

4.  Why did they pick me?

It depends on what your bank’s “customer risk formula” is. Each financial institution’s formula is secret, but the American Bankers Association tells us common factors include: Do you pay your bills on time? Do you pay all your bills on time? Did you increase your debt level? Did you open new accounts or new loans? Did you purchase property? Did you change jobs? Did your income level change? Answer “yes” to any of those and it could trigger a rate increase.

5. What can I do to make sure I don’t get the notice of doom in the mail?

Yeah, well. Good luck with that. Experts say to make sure you keep balances to less than a third of your credit limit, don’t leave cards unused and pay more than the minimum amount due, on time, each month.

6. If the dreaded notice does show up what should I do?

Join the club. You can try calling the credit card issuer. Explain to them you are upset about the rate increase and remind them you are a good customer.  If that doesn’t work, ask for a supervisor and plead your case more. If you aren’t successful, call back a couple days later and keep trying. You may also consider paying off the balance.  You can “opt out” of the rate increase, but that means closing your account and canceling your card.

7. If I opt out and cancel my credit card that I’ve had for 10 years, will that hurt my credit score?

It may. But experts say open another card, or transfer your balance to another card when you close your account.  And that’ll keep your score unscathed.

Award-winning investigative reporter Hank Phillippi Ryan is on the air at Boston’s NBC affiliate where she has broken big stories for the past 22 years. She has won 24 Emmys as well as dozens of other regional, national and international honors for her work. (http://www.hankphillippiryan.com). Mary Schwager is a journalist with more than 16 years of experience and is the investigative producer at 7 News. She’s won more than two dozen awards for investigative, consumer and feature reporting and writing, including nine Emmy Awards, seven Edward R. Murrow Awards and three Associated Press honors. She was also a state licensed detective and performed criminal investigations on behalf of the Wisconsin Public Defender’s Office. Find more of Mary’s articles at the Boston Examiner. Ryan and Schwager can be contacted at hryan@whdh.com and mschwager@whdh.com.