Make No Mistake...The Credit Card Company is in Control

If there is one thing I know for sure it is the credit cards certainly know how to work time in their favor!

Today I am addressing how quickly a credit Card company will act when raising your interest rate and the impact it will have on you.

First how long before the credit card company can raise your rate...One billing cycle...that's it!

 So how long could it possibly take you to reverse this increase if not addressed immediately? Depends on the credit card company but here are the highs and lows. Some credit cards require 12 straight months of paying on time before they will reduce your rate. The shortest time I have seen so far is 4 months.

OK...Let's assume this is the first time you have ever been late. There is a slight chance that your credit card company will not raise your rate. Let's assume they do raise your rate immediately.

 All is not lost but you must act fast!

You get what you negotiate not what you deserve. Remember, you have nothing to lose and a great deal of your money to save!

So what should you do...call your company and ask for the manager or supervisor. By the way, the best time to call is during regular business hours when a true decision maker is there. I have tried this strategy at night only to discover that no-one was available that had the power to overturn my increase! So is it really worth the fight?

Think that maybe it is not worth your effort to fight this interest rate increase? Take a look at the numbers and then determine what this will REALLY cost you.

Let's use a $5,000 balance breaking down the next 12 months only.

I am going with an original interest rate of 10% and an increased interest rate of 25%. Note that many credit card companies are raising interest rates to as high as 32%!

Here is the interest money you would have to pay in the 12 month period:

10% interest = $456.62

25% interest = $1,221.72

Looking for more incentive to fight that increased interest rate? How about this stat:

At the 10% interest rate your remaining balance = $4,086.74

At the 25% interest rate your remaining balance = $4,755.63

To me this equates to a total loss of $1,433.99 ($765.10 in new interest and $668.89 in additional remaining balance). THIS IS JUST THE FIRST 12 MONTHS!

You should have no doubt...you must fight to prevent this increase or pay dearly moving forward! You will find more infomtation related to this subject and other personal finances on our website www.NoDebtUniversity.com