Although I’ve never established a set of great personal financial practices, there’s one rule I consistently followed: always pay off the credit cards each month to avoid finance charges. I’d say I was successful about 95% of the time. Until this year, specifically this past holiday season. Like many people, the perfect storm of money pitfalls struck us right about Thanksgiving time. We had a final semester college tuition payment and less income coming in from my husband’s real estate business. So, instead of taking a machete to holiday gift spending, I pared back only slightly…and charged up the cards. January 15 rolls around, with notices of payment due. I took one look at the balance and choked on my Diet Coke. There was no way I was going to be able to pay the balance in full.

 

Last week, one of my friends and I were whining over lunch about credit card charges. Her card company recently notified her that her interest rate would go up – a lot. I hit the panic button. I certainly can’t afford a hike in interest rate. When I got home, I researched this and found - It’s true! There are many banks raising interest rates, even if you’ve never missed or been late on a payment. Incredible! According to an article in the New York Daily News, JPMorgan Chase, Citigroup, Bank of America and Capitol One all are raising rates.

 

According to Gail Hillebrand for the Consumers Union, “Your situation hasn’t changed; your bank’s risk tolerance has changed.”

 

Banks are required to notify you only15 days in advance of the rate hike. And, the notice may come in the normal monthly statement or in a mailer that could look like junk mail. The only recourse you have is to send a letter indicating you decline the new rate and will continue to pay the card balance to the current rate. The letter must be sent prior to when the increase is scheduled to take effect.

 

The good news for me – my card through Affinity Credit Union has not increased since I opened the account. Sandy Robinson assured me when I called to ask about credit card rates that “Affinity hasn’t raised or lowered credit card rates in 15 years. They are a ‘fixed rate’ and not a variable product tied to anything.” 

 

Whew. One less thing to worry about. And, one more reason to appreciate Affinity.