Credit card dilemma

Hi Cindy,

Yes the credit card companies can raise your interest rates and are now adding new fees as well.  Do not think that you are alone in this as millions of Americans have received letters in the past few months notifying them of changes to their credit card terms and interest rates, see this story . 

The best advice I can send your way is to talk to a professional debt consolidation office and get a free consultation about your financial situation.  They will have a few options that may be able to help you through this.

hope this helps...

Unfortunatley this has been a common practice lately for most credit card companies, especially Chase.

It is legal for them to do this, the laws are changing and adding a few restrictions on the amount of notice they have to give you and for what reasons they can change your rates.

Credit card companies can raise your rate for no reason.  You see this a lot lately because the government is about to pass some new laws to prohibit the practice in the future.  They will most likely not do anything to help you even though you have paid on time.

I would looking for a new card with a lower interest rate that you could transfer the money over too.  Don't close the accounts you don't want to lose the good payment history you have with them.  Get credit help if you need it and delete collections to boost your credit score if needed.  Good luck.

Yes they can raise your rates at any time.  It's in the fine print.  Really, it is!  Paying a little to each one every month will not go far, you need to attck these things with a vengeance !!

Now, what to do about them!  First, cut up the cards.  You need to get rid of them so you won't keep using them for "emergencies".  As you have found out, emergencies are exactly the time you don't want to add more debt!

You need to save some cash for a starter emergency fund.  Start with $1000.  Pay the minimums on all the cards until you have a small cash emergency fund saved up.  This will help catch the little things, and keep them from turning into debt.  Do this in an account that is NOT tied to your checking account.  You don't want this to be used for overdraft protection, otherwise it will get spent.  We have ours in  a totally different bank from our regular bank.

Once you have your beginner emergency fund in place, list your cards either in the order of largest payoff balance to smallest, or from largest interest rate to smallest.  Pay the minimums on all the cards EXCEPT for the first one on the list.  To that one, pay the minimum PLUS any extra money you can squeeze from your budget.  Sell things on Craigslist, work extra hours, whatever you can do to squeeze out more money.

Once that balance is paid off, move to the next one on the list and pay the minimum payment on that card PLUS all the money that you were paying on the first card, plus any more extra money you can gather.

Rinse and repeat until they are all paid off.  Once that is done, take all the money you were putting to the last card and use that to continue to build up your emergency fund to around 3-6 months living expenses.