When you apply for a credit card, the application that you sign is also a
legally binding contract laying out all the terms between you and the bank, such
as the interest rate and how its calculated, the grace period, whether theres an
annual fee, etc.When you apply for a credit card, the application that you sign
is also a legally binding contract laying out all the terms between you and the
bank, such as the interest rate and how its calculated, the grace period,
whether theres an annual fee, etc. While you have to agree to the terms and
sign if you want the credit card and while the lender will certainly hold you to
the terms, the lender doesnt feel similarly committed.Lenders like to constantly
amend the terms, effectively changing the deal after it was made. This is one of
the few industries where you can be charged more than you originally agreed to
pay.One of the main reasons theyre doing this is because they are constantly
checking your credit score, looking for an excuse to raise rates and thus their
income.So, even if you have never been late on any payment to any bank or
utility, your credit score can raise as youre approaching your credit limits. Or
you could have missed a payment or lost your job. Lenders have any number of
excuses for their actions.Also the lenders count on the customers not reading
the little inserts filled with legal jargon they slip in with your bill or mail
separately, at least until its too late. Apparently the vast major of card
holders never look at these amendments. Theu also hope that most of us are
ignorant of our credit card rights.Not all changes to the credit card agreement
are necessarily harmful to you, although you'll rarely find one being done in
your interest. Most of them change minor terms of the agreement.But they can
contain nasty suprises as well.The problem the lender has is that the original
agreement is a binding contract that the lender cant change unilaterally. They
have to give you an out. Thats why it pays to pay attention and know your credit
card rights.I once had a credit card account with the stated interest rate of
13.5%. I was financially strapped and was using more and more of my available
debt. I had never missed a payment or was late to anybody for at least 10 years.
However, not paying much mind to my statements, I did not know the bank sent me
a notice that it would raise my rate if I used the card past a certain date. I
did and I found myself facing an interest rate of 24%. Calling the bank and
complaining and threatening to take my business elsewhere had no effect.After
that I started to pay more attention to those little slips of paper. Twice more
different lenders tried to do the same thing. But I followed the directions on
the amendments to the credit agreement and wrote the bank within the time frame
given, telling them to cancel my account. You must no longer use the card
afterward. If you do, youve accepted the new terms in spite of your letter and
youre stuck with them.If you have any automatic charges being made to the card,
including things like credit insurance that the lender itself sells you, make
sure they are cancelled in writing before the cutoff date. One little automatic
charge will also constitute an acceptance of the changes in the credit terms.
The bottom line is that the lender will consider any little slip in its favor
and hit you with the higher rate.As long as you continue to pay your bill under
the terms of the original agreement, the bank can do nothing about it. You can
pay off the bill at whatever pace you see fit, as long as you make the minimum
payment.I consider the lenders actions as akin to kicking you while youre down.
Most people wouldnt be using up their available credit unless they were already
struggling. My credit card payments went up $46 per month on that card. I saved
thousands by refusing to go along with other proposed increases.The issuer of
one of my cards that has carried a zero balance for several years has been
periodically raising the rate to where it is about 25%.Know your credit card
rights and fight back. If youve havent gone completely over the edge yet, you
might find a lender willing to work with you. ABOUT THE AUTHOR Chris
Cooper is a retired attorney who is very familiar with debt, being in it too
many times in his life. These articles pass on some of the knowledge he has
gained striving to become debt free. He is editor-in-chief of
http://www.credit-yourself.coma website devoted to debt management
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