Opt-out of credit card interest rate increases - WAOW - Newsline 9, Wausau News, Weather, Sports

Opt-out of credit card interest rate increases


EAU CLAIRE (WQOW) - A new law has many credit card companies increasing interest rates but that doesn't mean your rate has to change. It does mean that you might have to pick up the phone. 

Under the Credit Card Act of 2009, companies will no longer be able to raise rates on existing balances. That law takes effect in February so the deadline has a number of companies trying to lock in higher rates right now.

We know of a number of people who have received letters from their credit card company telling them their rates are going up. At least one person we've talked to called the company to challenge it and were told they had the right to opt out of the higher rate. That's something we'd all consider, right? The problem is many people don't know that's possible. 

Until now, opting out was not a consumer right. It was something that could only be granted if the company agreed to it. Keep in mind, if you do opt out of the higher rate, the company has its own recourse.

"Probably what's going to happen then is that the credit card company is going to suspend any charging privileges at that point, but their interest rate wont change and neither will their payment," says Wayne Jennings, a consumer credit counselor.

Generally, opting out means the consumer can no longer make purchases with the card. Instead the old, lower interest rate will be applied while the consumer repays the balance.

Credit counselors say most companies do not want to lose business and are often willing to negotiate with the cardholder -- all you need to do is pick up the phone.

If you do talk to a customer service representative about your account, credit counselors say it's a good idea to send a follow-up letter to confirm any changes.

Powered by Frankly