Ask Andy: Credit card rate hikes & service charges - WMC Action News 5 - Memphis, Tennessee

Reported By Andy Wise

Ask Andy: Credit card rate hikes & service charges

Man, some of you are REALLY ANGRY with Chase bank!

"Dwayne" of Horn Lake says he just saw his Chase credit card bill TRIPLE ...with a $10 service charge tacked on and a 2-point increase in his interest rate!

Dwayne e-mailed:

"Can they change a "locked" interest rate that I've been paying on for several years???  Is there anything I can do to keep them from breaking their agreement with me?"

First of all, Chase customers nationwide are pretty upset about the bank's credit card rate hikes and service charges.  Click on this:

http://consumerist.com/5129786/chase-invents-120-annual-fee-for-balance-transfer-customers?skyline=true&s=x

In Dwayne's case, though, I doubt Chase broke its agreement.

His "locked-in" rate is likely on BALANCE TRANSFERS, not current purchases.

Chase can jack up its rates any time it wants -- under a few conditions.

By law, your credit card company must notify you by mail 30 days before it raises your APR or adjusts your credit limit. Dwayne did acknowledge that Chase did notify him about the change.

Check your card's terms and conditions on transfers versus purchases.  Usually, there is one interest rate for balance transfers and another for purchases.

Your card's paperwork should also list reasons for rate changes. Beware! They may include reasons like "BAD ECONOMIC CONDITIONS" or, here's the one that gets people going:  "ANYTIME FOR ANY REASON." Some credit card companies actually write that in their terms and conditions!

Dwayne tells me he started negotiating with Chase. He says Chase offered him a lower interest rate over the next two years on his purchases, which would then jump nearly 5 percent after the second year, or cancel his card and pay off the balance in 30 days with no service charges.

Dwayne, if your balance is low, take the second option. You might take a hit on your credit score for canceling the card, but it will only be a temporary hit.

Even better, shop some other cards and transfer your entire balance to a lower APR card without all the hassle.  I recommend www.lowcards.com for shopping the most competitive credit cards.

 

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