Why the credit cards interest rate may increase suddenly.
An increase in the credit card interest rate typically worries the credit card users who are used to carrying a balance from one month to another. The higher your interest rate the higher your financial charges will be. This means that rotated balance from one month to another you will end up paying a lot more as interest and finance charges on a credit card with a higher.
When you sign up for a credit card, you sign up for a particular rate of interest. But you may be surprised to find out that this rate can increase. The new federal law that was put into effect on February 22nd 2010 provides that the bank cannot increase the credit before 12 months of the account being active.
However certain circumstances like account delinquency and late payments may have the interest rate go up for that the creditor is also required provided the credit card you submit an advance notice of a bad case with the option of opting out of the higher rate of interest.
While certain situations might have changed with the new law having gone into effect on 22 February 2010, according to the consumer action survey of us make your credit card rate may have increased or your credit card may have been closed many of the following reasons, some of them being completely independent of your actions.
1) You were late on the credit card payment.
2) You were late on a payment to another credit card.
3) You were too close to your credit limit.
4) You went over the credit limit.
5) You got too close or went over the credit limit on another card.
6) Your credit score drop.
7) You have too many credit cards.
8) You have too much debt.
9) You check for the payment of the credit card Bill passed.
10) You file for bankruptcy.
11) You gave the bank false information about your credit history.
12) You fail to adhere to any of the terms in the cardholder agreement.
13) You have a variable rate tied to another interest rate that increased.
14) Your credit cards issuer’s business strategies changed.
15) Market conditions.
Whenever the interest rate on your credit card increases you have the option of opting out of the increase in the credit interest hike and paying off your current balance at the old interest rate. However, the creditor is most likely to close your credit card account if you choose to do this.