Tricky credit cards
Posted on October 20, 2007
Filed Under Advice, Credit Rating | Comments Off
Currently, credit card issuers can change virtually any rate or term with just 15 days’ notice to the customer. Consumer advocates have long denounced these practices, but they’re perfectly legal.
A bank may decide to raise your interest rate to the default rate (apr. 27% in most cases) because of your high balances. They can also decide to lower your credit limit and the result of this action is that your credit score goes down a few points because of your higher debt-to-limit ratio. If any of this happens to you, the best way to fight back is to pay off your balances as quickly as possible by transfering your balaces to one of the many balance transfer credit cards. You can also alleviate the damage to your credit scores by transferring some of your balances to other cards.
For scoring purposes, it’s generally better to have smaller balances on several cards than big balances on one or two cards.