CC and variable rate?

iVillage Member
Registered: 09-23-2002
CC and variable rate?
3
Thu, 03-12-2009 - 1:11pm

This past year I decided to pay off all of my credit card debt which was standing at 16k, and I am down to two credit cards, one is 3k and the other is 9k. I hope to be done paying off the larger amount cc first this summer. But what I noticed with that card is that my interest changed quite a bit. It went from 12% to 17% without any written explanation. I called the citi card, and they said that because my rate is variable they can change it often. They were able to lower it back only little bit, to 14%. That was last month.


This month's statement I noticed my interested went up by little bit again. I called them and they said that variable rate changes, and yes that can change on a monthly basis. I told them that I pay on time, and have never been late, and don't understand why my rate keeps on changing. She said because of the economy. Ugh!


I told her this was very frustrating as I didn't receive anything in the mail about it. She said they sent a little piece of paper together with my statement. And that they can write something up for me and mail me those changes. Wow!


Maybe they seen that I've sent huge chunks as of late trying to pay that cc off and are trying to get more money out of me? Could someone explain how the rate changes? And who decides that? I thought the federal government lowered the prime rate, but it looks like that has nothing to do with cc. Am I wrong?


Any help I would appreciate it. Thank you!


:( Jass




Edited 3/12/2009 1:15 pm ET by after_leptirica
Community Leader
Registered: 03-17-2003
Thu, 03-12-2009 - 3:08pm
Over the past couple years the lenders had wonderful lobbyists and sympathetic ears in Congress, thus the laws were changed in the lenders favor and they can jack up your interest rates whenever they want.
iVillage Member
Registered: 07-02-2005
Fri, 03-13-2009 - 1:46pm

That's so frustrating! I've heard of that happening, but luckily I haven't had that happen to me (yet).

I'd definitely shop around for a better credit card, or find a way to roll it into another loan (I once refinanced my car at 4.6% to draw out $2000 in equity to pay off a 25% interest rate credit card.) I'm still paying on my car, but that credit card is out of my hair and I can handle a $250 car payment better than I can handle a $150 car payment plus a $150 credit card payment that adds on 25% interest every month. Overall the monthly payment only went down by $50, but it basically lowered my overall interest rate to 4.6% for everything. This was a couple years ago, so the rates have changed I'm sure, but if you're interested in that go to a credit union - their rates are so much better than any bank.

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iVillage Member
Registered: 11-17-2007
Thu, 03-19-2009 - 1:57am

If I were you I would just apply for another credit card with lower interest if they are going to play those kind of games on you


Mary Ann