Watch for changing credit-card terms

It pays to be on the lookout for changing terms and conditions on your credit cards. That’s something one of our staffers found out the hard way last November when he suddenly realized that the payment due date on one of his credit cards had been moved up by several days. He avoided missing the deadline by making a last-minute online payment, for which the card issuer charged him $15.

We have also heard numerous complaints from cardholders whose interest rates rose dramatically, in some cases almost doubling, even though they’d made all their payments on time. That’s especially insidious because the higher rates apply not only to new purchases but also to existing balances that were incurred under the previous, lower rate. That practice could end or be seriously curtailed under rules changes proposed by federal regulators earlier this month, which could be adopted in whole or in part later in the year.

Other common changes include shorter grace periods and increases in the fees charged for transgressions like sending a monthly payment in late or exceeding your credit limit.

Some changes do not affect finance rates or other basic terms, but they could reduce the extras that many cards provide. For example, Citibank and American Express recently notified their cardholders that while they were making certain improvements in their rewards programs, they were reducing or eliminating premium rewards for purchases made using the cards at drugstores, supermarkets, and gas stations.

What to do. Thoroughly read your bill each month, as well as any notices your issuer sends. If you see a change that you don’t like, complain. The issuer may be willing to make concessions to keep your business. Issuers usually can change terms with little or no notice. In some cases, you may be able to pay off your remaining balance under the old terms, but your account will probably be closed. Of course, you can also look for a new card with better rates or other terms. But you’ll have to keep a close eye on that one too.—Anthony Giorgianni

Comments

[Lisa P]

If you’re among the so-called intellectuals who thought that U.S. Secretary Henry Paulson plans to buy up all of those devalued mortgages that are flapping in the wind by using the second half of the recent $700 billion financial rescue program, think again. Instead, that mortgage juice is going to be spent on consumer credit. Payday cash loans should be considered in this group and should be eligible to receive help as well, but that's not likely. Paulson says that he wants the American people to have easier access to such traditional forms of consumer credit as car loans, student loans, and credit cards. These forms of consumer credit have become more costly because of "illiquidity” in the consumer credit division. “This is creating a heavy burden on the American people and reducing the number of jobs in our economy,” he says, admitting that his previous version of the rescue plan was a mistake. Hopefully, the intellectual-Paulson will probably save us the “heavy burden” many of us are already under. Imaging if America had a President who was willing to admit his mistakes. Maybe America would be prepared to pick up any pieces and move forward. Even better, maybe certain problems could have been avoided in the first place. Government officials are making a wise move by planning to use some of the bailout money to restore confidence in private investors to bring them back to the market. With a strengthened economy and with investors in the world market, hopefully it will be followed by more stable jobs. With a more stable job market, less people will depend upon payday cash when a slight fumble occurs. Although the industry will remain to accommodate our needs during unexpected events, it is not designed for long-term financial dependency.
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