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Credit card rates could be going up even if you pay on time

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Even if consumers are trying to do all the right things after getting into credit card debt it appears they can still be hit with increased interest rates because of the down economy.

Even if consumers are trying to do all the right things after getting into credit card debt it appears they can still be hit with increased interest rates because of the down economy.

According to Detroit Free Press columnist Susan Tompor, many credit card holders will see their interest rates increase in the coming months, but unlike rate hikes in the past, these increases will have nothing to do with late payments or going over their credit limit.

Emily Peters, a credit analyst says one reason the banks may be increasing rates on consumers is their anticipation of the reforms set by the Federal Reserve which will make it harder for them to raise rates after July 2010.

"With those reforms, basically credit card companies are not going to be able to have any-time-any-reason rate increases," Peters told Charlotte, North Carolina radio station WFAE. "So we're a little bit worried that some of these rate increases may be pre-empting that change."

To avoid these interest rates in the future, some consumers may want to look into acquiring a prepaid credit card or prepaid debit card which only allows them to spend the money loaded on the card and cannot carry a balance.


 
 
 
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