CREDIT » CREDIT REPAIR & REPORTS

The loosely regulated credit card industry is trying to fill in their financial gaps with higher interest rates to their cardholders. Individuals concerned that their rates may go up should carefully review all the material sent to you from your current credit card companies. Legally the industry can consumer rates at will and without notice, so it is up to you to be your own consumer advocate.

Despite multiple rate cuts by the Federal Reserve, many consumers may start paying higher interest rates for the same credit card they have had for years. Ed Mierzwinski a consumer advocate and consumer program director for the U.S. Public Interest Research Group, notes most major issuers can change your interest rates, for many reasons including seemingly bad behavior of the cardholder as well as just wanting to increase their profits.

Citibank recently announced a rate increase on average of 3% to help with their bottom line. Dozens of blogs have postings from irate consumers who have had their credit card interest rates double due to no fault of their own. This is just the beginning of the trend and until tougher regulations and laws are issued by the Feds, there are no signs of it stopping.

For those who are troubled by rate increases you can contact your credit card company and see if they are open to negotiation and lowering your rate. Additionally, if you are lucky enough to have an excellent credit score, it may be time to research a 0% credit card debt transfer offer and take advantage of it.

Industry standards for issuing new credit cards to consumers is getting tougher by the minute and applicants are being scrutinized more than ever. Now is the time for consumers to focus their efforts on cleaning up and improving their credit scores to the highest rank possible as those with lower scores are finding it increasing difficult to secure new lines of credit.

Until recently a 600 Fico credit score was considered fair and those individuals with that rank were able to secure new, bank issued credit cards. However, with the credit crunch taking a bite out of our economic liquidity, only those with 700 or higher are going be considered for new lines of credit.

Other factors contributing to whether or not someone will be approved for a credit card is something called Behavior-based risk assessments. Basically the spending habits and patterns of loan defaulters are held up as the negative model for new card applicants. Those closer your behavior is to the defaulters, the less risk the card issues want to take on you and the greater chance of having your application denied.

Consumers worried about their dwindling line of credit can take action and focus their energies on raising their credit scores. If you have a low APR credit card and enough limit on there, consolidate all your debt into one place. Stop adding new debt to the equation and concentrate your efforts on paying off the existing mass on time, pay more than the minimum and focus in on lowering your balance all together.

Credit card issuers are utilizing alternative strategies for weeding out potentially undesirable cardholders. To reduce the risk of losing more money from credit card payment defaulters, many lenders are not only reviewing ones FICO credit score, but are using a system called behavior-based...

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