Friday, May 15, 2009

How to bypass high interest rates on your credit card

As per U.S. Senate Banking Committee around one-third credit card holders in US pay interest rates of over 20%.

Here are some simple steps on how you can thwart higher interest rates on your credit card:

Keep a watch on your monthly statements

You may feel this is something which should be ignored but I must tell you that you should keep reviewing your credit card statement. As per law credit card companies are required to have a written notification of pending rate hikes and in case you get to know about a hike in interest rate get in touch with your credit card company.

Hit back at your credit card company

In case your credit card company says that it is going for an interest hike on your credit card tell them that in case they intend to go ahead with it you won’t be interested in their services.

If they don’t budge get hold of another credit card with 0% balance transfers and no annual fee and then approach your existing card company and tell them about your current deal, in most of the cases the companies are willing to negotiate.

As canceling your credit card could impact your score therefore think twice before leaving your current card.

Opt for the temporary closure route

Rather than opting for closure of credit card account which could hurt your credit score you could ask your credit company to suspend your account at the current rate which implies although you can’t use your card but its still open and safe from any kind of credit score damage. Later on you could activate your card at lower interest rate.

I hope these simple yet important steps help you to avoid high interest rate on your credit card.

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