“Consumer Alert: Check Your Interest Rates Now!”

I had a pretty emotional night last night.  It started when I got a cute little notice from Mint.com telling me that my American Express card’s interest rate was 17%.  ”That can’t be right,” I thought.

I will admit that in the past, I didn’t really look at the statements.  For some reason I avoided looking at the interest rate and purchases.  It’s like if I don’t look at them, they don’t really exist.  Weird, but it’s a coping mechanism.  Anyway, since I’ve been trying to take control over my finances, I have been looking at my bills, and so I knew that Mint.com had to be mistaken.  I called up American Express, and yup, my interest rate had changed from 11% to 17%!  Mint.com was right!

I tried to stay calm as I asked the representative what had happened.  I’m never late, and I’ve never missed a payment.  She said that they had sent me a notice in August informing me of the rate change, and I had the option of opting out at that time.  Since the deadline for opting out had passed, there was nothing they could do.  My interest rate was locked in!  Oh, and my 17% rate was actually the lowest rate they had–I should be happy about it.  I tried to remain calm, but really I was mad at myself for not paying close enough attention to my finances.  I cancelled my card out of anger and frustration.

This is the third card I’ve cancelled this week.  I’ve gotten two other notices from credit card companies saying that my rates were going to increase unless I opted out.  After doing some digging, I found out that there has been a rash of complaints from credit card consumers all across the nation.  In February new legislation goes into effect which will prohibit credit card companies from arbitrarily raising rates on existing balances.  So, what do they decide to do? Raise rates now while they still can!

Just to put this a little bit into perspective:

• Citigroup has received $50 billion in bailout money
• Wells Fargo has received $25 billion
• American Express has received $3.5 billion

I guess that money just wasn’t enough so now they are forced to raise interest rates on us.  Fees for late payments and going over your credit limit have gone up, too.

What you need to do NOW:

• Call each of your credit card companies to find out if they have already or plan on raising your rate
• “Opt out” of any interest rate change.  Basically what this means is that you are not agreeing to your card’s new terms, so you need to call or write your credit card company telling them.  Most likely it also means that you will either have to cancel your card now or when it expires to keep your current interest rate.

I’m still researching what you can do if your rate has already been changed (like mine), so I’ll keep you posted on what I find out.

COMMENT: Have any of you received notices like this?  Do I have the right to be angry or is it my own fault for not paying close enough attention?  Also, if you know of anyone who can help me fight this, please shoot me an email.

FOLLOW: Like what you see? Add our RSS feed! [what’s that?]. Or start your morning with Republic of Austin in your InBox! Or read us 24-7 on Twitter!

Related posts:

1. “Financial Awakening, Part I: Drowning in Debt”