Credit Card Debt Blog

Most consumers are aware of the importance of their credit report. This document, offered to consumers and lenders by the three major credit bureaus, offers a fairly complete listing of financial transactions and debts incurred by a consumer. Lenders analyze the report, along with the connected FICO score, to determine whether a consumer is worthy of receiving further credit or loans. What many consumers may not cognize is that credit card companies regularly check their credit reports, and unfavourable entries may ensue inch a higher interest rate on their credit cards.

We have got previously noted that many credit card companies use something known as a “universal default clause” in their terms of service. This clause allows the company to raise interest rates on the customer’s card if the client pays measures late. A late payment to the phone company could ensue in a higher interest rate on the Visa card. Most companies also allow themselves the latitude to raise their customers’ interest rates for any ground at all. With this in mind, the credit card companies be given to run occasional credit checks on their customers, often raising rates if they detect any activity that, in their opinion, do the client a higher risk. This mightiness go on even if the client have a history of paying his or her credit card measures on time.

The kinds of things that may make a “risky” client include taking out further loans, further credit cards, or edifice balances on existing cards to at or near their limits. The companies warrant this activity by saying that consumers who make these things make greater hazard for the lender, and these costs must be passed on to all of their customers. The problem for the client is that these higher interest rates are often assigned without warning. The new rate uses to existent balances, too. An interest rate tramp today could intend that the telecasting you bought last autumn have suddenly go more than expensive.

What can consumers do? Keep an oculus on your credit card measure and your credit report. You can have a transcript of your credit report, for free, at http://www.annualcreditreport.com. As for your credit card bill, ticker the interest rate. If it abruptly changes to a higher rate, phone call your credit card issuer and inquire them about it. They will often reduce the rate if you name and complain. If not, your lone option may be to shop around for another card.