CREDIT CARDS » Credit Card Rates

Maintaining a healthy credit score is a big priority for many Americans. With a great credit score consumers can save tens-of-thousands of dollars on mortgage rates, pay less money for car insurance and even qualify for specific jobs. In times of economic downturn, it may be prudent to remove yourself from the credit card spending cycle. Closing your credit card account may not be the best solution as that action may actually negatively impact your credit score. However, there are some smart tips for using your credit card to survive hard times.

Often large credit card debt is accrued by people who needed to use their credit cards to purchase necessities like gas and groceries during rough times. However, that process may end up costing substantially more down the line. If you charge the basic necessities, it is important to try to pay off your credit card bill in full every month or risk paying more than you bargained for in the guise of compound interest charges.

Since it is not recommended to completely close out your credit cards, you can use that line of credit to make small manageable purchases monthly and then pay off the balance in full. If you just use a credit card for one tank of gas a month you should be able to easily afford that purchase, as well as keep your credit history strong.

Don't forget about credit cards that give rewards. By using credit cards with rewards to pay for all your necessities, you will get gift certificates or even cash in return - which will save you some money.

The current economic situation affects many sectors of the economy, including the credit card companies who issue and manage lines of credit to millions of American citizens. With many companies downsizing, many credit card holders are defaulting on their payments and outstanding accounts have increased. For the reason, credit card companies are trying to increase their existing revenue streams to help mitigate their financial losses. One way they are filling the gap is by increasing the credit card rates for their existing customers.

Many people that were affected by the increase in interest rates are upset. However, there is not much a consumer can do because the rise in credit card interest rates are out of their control. So regardless of your credit history or years with a specific account, you may find that your credit card rates are rising right now, even with the falling interest rates on Wall Street.

To ensure that you are aware of all the credit card news that will affect you personally, make sure to check with your credit card provider. Legally, you must be notified of changes such as increased credit card rates for fixed rate cards (15 days prior) or a decline in the amount of your available credit. Additionally, new laws will take effect soon (in 2010) that will prevent the credit card companies from raising the interest rate on the existing balance you carry; the rate spike should only apply to new purchases after the date indicated in the term update they provide you with.

If you discover that you are being subjected to a rising credit card rate and have a good, solid history with the credit card provider, you can always contact them directly and request that they do not apply the change to your account. Whether or not they are going to adhere to your plea is another story and you can always take your business elsewhere (via a balance transfer) if they do not agree.

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