Be Aware that Credit Cards Change

Posted by Nick Niesen on October 29th, 2010

The changes in terms for your credit card can impact you financially. So many people simply pull the statement out of the envelope and never read any of the changes in terms or other materials sent by the credit card company.

There are even some people that assume that their rates won't change and that terms won't go against them.

Make sure you read everything your lenders send you thoroughly. For example, your late fees, overlimit fees and other charges may be rising. The default rate could be going up as well.

Recently some credit cards have raised the minimum amount percentage by a percentage point or more. While this helps you in paying off your card about two weeks faster, it can hurt those that are stretched to the maximum breaking point.

Many credit card borrowers are outraged when things are changed. How can they do this, they ask. Well, they can. They've always been able to, and they do it all the time.

When you accept a credit card, you are signing to the terms promised at the time of offering. But you are also signing a statement that says the issuer can change the terms anytime it wants to, to anything it wishes. Most credit cards are only required to give you a sixteen day notice in the change of terms.

What can you do if your terms are changed? You can either accept or cut the card up and never use it again. If you choose option two, you preserve your current terms, but lose the card.

If you don't read the terms, you can't say you didn't know. The next time you use the card, the purchase is acceptance of the terms. You are blindly agreeing to new terms.

Plus, chances are that the terms will not be changing to benefit you. Last year, credit card issuers collected over $16 billion in penalty fees last year. Seventy percent of those dollars were from late fees. The fees are rising. Most people paid over $34 dollars per incident last year.

Make sure that you understand all of the terms of your credit cards, including what the rates and fees are. And understand that those terms can change at any time. You are taking a huge risk by taking on a debt that is out of your control. Make sure that you know what can happen before you agree to it.

Check your statements to see that you are being charged teh correct rates. You can see your rates increase without any default on your part. There are many reasons that card companies will give you for changing your rate.

If you want to insure that you never face that late fee, schedule regular minimum payments. You can always pay more anytime during the month to pay off your balance faster. But by at least having that minimum come out automatically, you are eliminating any missed payments.

If you see that there is trouble in your future, make sure you take action right away. Sitting and waiting can cost you money if new fees kick in on your accounts. Talk to the lender before you have any troubles with your card.