Protect Yourself from Higher Interest Rates

Here is something your credit card company will never tell you: they are using any excuse that they can find to raise your interest rate. Did you realize that if you are late paying any of your bills that are unrelated to your credit card, your credit card issuer can then use that as an excuse to raise your credit card interest rates by labeling you as a credit risk.

So for instance, let’s say you are disputing a medical bill that you feel is unfair. While the dispute is taking place this time to pay it off has lapsed and the people that issued a medical bill referred to collections. Your credit card issuer will see this on your credit record and then use it as a reason to raise your interest rate.

Is this fair? No, we absolutely believe it is not fair… but it is however, legal. Until the Federal Reserve Board’s credit card reform act goes in to effect in July of 2010 I’m afraid that we are pretty much at the mercy of what the credit card issuers. And right now, they are badly in need of money and will do whatever they can to raise it.

So how do for this happening to you? Well, for starters make sure that you pay all of your bills on time. As we discussed with the medical bill example many credit card companies are looking for any possible reason they can to raise your interest rates, even though you have never been late on any of your credit card payments.

If you are in dispute with any of your creditors the wise course of action is to pay the bill first if you can afford it and then resolve it through dispute resolution. Of course, you can only stay off your credit card bill and avoid and avoid paying any interest rates.That is of course the ideal scenario, but unfortunately with the way the economy is now many people cannot afford to do that.

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