Apr 28 2009
It seems as if the ‘credit crunch’ is officially upon us. According to this story in the Post-Gazette, credit card companies are raising interest rates, reducing cash-back rewards programs, and lowering credit limits.
I can see why they are cutting back rewards and lowering credit limits … but increasing interest rates? That’s just going to send more people into default.
If people are struggling to pay their credit card bills as it is, raising their interest rates will only keep them in debt longer. Maybe that’s the credit card companies’ intention, as they’ll get more money out of the person that way.
The article states that credit card companies are required to tell you how long it will take you to pay off your balance if you continue to make only minimum payments. Is this a new thing? I don’t recall seeing it on past bills, but I haven’t used my card in quite awhile so I can’t say for sure.
Depending on your interest rate and your balance, there is a point at which if you only make minimum payments and never charge another dime, you’ll never be able to pay it off.
I’m pretty sure we were once at that threshold, but fortunately we were able to start paying much more than the minimums.
I’m glad I don’t have credit card debt, and I hope to never again.
If you use credit cards, are you seeing your terms change?