You should first check that your credit card company is operating within your rights as a card holder. The U.S. Congress and President Obama signed the Credit Card Accountability, Responsibility, and Disclosure Act on May 22, 2009. The law is designed to protect an increasing number of people that are relying on credit cards to get through the current troubled economy.

Effective 2/11/2010, these new laws require that credit card companies give cardholders 45 days advance notice and an explanation of an interest rate increase; they prohibit credit card companies from increasing interest rates retroactively on existing balances unless the cardholder is more than 60 days late in making a payment; and if a cardholder's interest rate was raised for late payments, lenders are required to restore previously lower interest rates if the cardholder pays the minimum balance on time for six months.

If the credit card company has complied with the new regulations in raising your interest rate don't panic, you still have a few other alternatives. First, call the credit card company and explain your situation. Ask them if they will restore your credit card interest rate to the original rate - you may need to speak with a supervisor. If this doesn't work, consider transferring your balance out to a new credit card with a lower rate - be careful of balance transfer fees. Another option is to put your credit card debt on a home equity loan or some other type of consolidation account. Or, you can make the new minimum payments on time for six months, at which time (after Feb 2010) the credit card company is required by law to restore your interest rate to the previous lower rate.

For related reading, take a look at Expert Tips For Cutting Credit Card Debt and Should You Close Your Credit Card?

This question was answered by Steven Merkel.

  1. Is Apple Pay safe and free?

    Apple Pay is a mobile payment system created by Apple to reducing the number of times shoppers and buyers have to pay for ... Read Full Answer >>
  2. Can you use your Walmart credit card at Sam's Club?

    Consumers can use their Walmart credit cards to shop at Sam's Club. However, they cannot use their Walmart credit cards when ... Read Full Answer >>
  3. How can you cancel your Walmart credit card?

    Walmart offers two types of credit cards: the Walmart MasterCard and the Walmart credit card. How to Close Your Walmart Credit ... Read Full Answer >>
  4. Does the Walmart credit card have an annual fee?

    The Walmart credit card does not charge annual fees to its cardholders. It does, however, have other fees associated with ... Read Full Answer >>
  5. How do NetSpend cards work?

    NetSpend prepaid MasterCard and Visa cards are popular prepaid debit cards requiring no minimum balance and no credit check. ... Read Full Answer >>
  6. Can the Best Buy credit card be used anywhere?

    The Best Buy credit card can only be used in Best Buy stores and when making purchases online through the Best Buy website. ... Read Full Answer >>
Related Articles
  1. Credit & Loans

    Walmart MoneyCard Vs. Walmart Credit Card

    Discover how the Walmart MoneyCard and the Walmart credit card have different benefits that may influence your decision on which one to choose.
  2. Savings

    These 10 Habits Will Help You Reach Financial Freedom

    Learn 10 key habits for achieving financial freedom, including smart budgeting, staying abreast of new tax deductions and the importance of proper maintenance.
  3. Credit & Loans

    Have Bad Credit? 6 Ways to a Personal Loan Anyway

    It'll cost you more, but borrowing is definitely doable. Here's how to proceed.
  4. Credit & Loans

    How To Minimize Holiday Debt Before It Happens

    Holiday expenses can drown you in debt. Find out how to avoid this festive spending hangover.
  5. Credit & Loans

    These Are The Best Credit Cards For Making Balance Transfers

    Handled correctly – and very carefully – a promotional credit card balance transfer offer can save you money. Here are some of the best deals around now.
  6. Investing

    How to Raise Your Credit Score Quickly

    Here are the best tips for raising your credit score quickly.
  7. Credit & Loans

    Getting Your Name Off A Cosigned Loan

    If you want to remove your name from someone else’s loan, there are four key ways to do it.
  8. Credit & Loans

    How Credit Card Delinquency Works

    When you pay less than the minimum monthly payment on your credit cards, you become delinquent.
  9. Credit & Loans

    5 Bad Moves That Will Torpedo Your Credit Score

    Your credit score can change if you aren't careful. From missing payments to carrying high balances, there are many ways to torpedo your credit score.
  10. Credit & Loans

    5 Common Misconceptions About Your Credit Report

    Your credit report is one of the most important factors in determining your ability to get loans and new credit and has a major influence on your rates.
  1. Transferable Points Programs

    With transferable points programs, customers earn points by using ...
  2. Luhn Algorithm

    An algorithm used to validate a credit card number.
  3. Roll Rate

    The percentage of credit card users who become increasingly delinquent ...
  4. Truncation

    The requirement mandated by the FTC for merchants to shorten ...
  5. Purchase Money Security Interest (PMSI)

    A security interest or claim on property that enables a lender ...
  6. Linked Transfer Account

    Accounts held by an individual at a financial institution that ...

You May Also Like

Trading Center