The Wong Ohana

• Be aware that Credit Card agencies have the legal right to change your interest rate at their whim, or if you have made any changes in your recent purchasing activity.

This is a very powerful statement - and its TRUE. So UNDERSTAND IT, and take precautionary actions to ensure that you always know what you are being charged. Something you do on Card “A” can cause Credit Card Company “B” to make a change in your rates - so be diligent and stay on top of it. KNOW what your rate should be, and VERIFY each month that it hasn’t changed.

Just because you haven’t used that card recently doesn’t mean that they aren’t watching what you are doing everywhere else. They can change your rates anytime they want to, so make sure that they don’t, or if they do, make sure you know about it as soon as possible so you can call them and work out a better rate.

If you make a large purchase like a car or a hot tub, that can change your debt to income ratio - - - even if you didn’t use Credit Card “A” for that purpose, you may find that your rate has changed because of it. Call them and work it out. You can ask them to lower the rate back down again.

If you weren’t checking your monthly statement (which you WILL be doing NOW because you know better, right??), you would never have noticee the change. You think you should be paying 7%, but you could actually be paying 12% because of something you bought somewhere else. And that could have been happening for months and months and you’d never be the wiser. They are NOT required to notify you that they changed your rate! And if they are nice enough, because you have asked them NICELY to help you, you can ask that they make it retroactive back to when they raised it. No guarantees that they’ll do it, but it has been known to happen, and you lose nothing by ASKING.

Filed under: Credit Card DOs and DON'Ts, Personal Finances on January 11th, 2008