Up, Up, And Away – Check Your Credit Card Statement!

Have you received a letter from your credit card company?  (It might be bundled in the same envelope as your statement, or it might be delivered separately.)  If so, be sure to read it.  Why?  Because, several credit card companies are changing their terms, rates, and policies.

According to Credit Addict, both Citibank and American Express have recently made several changes.

A summary of the changes made by American Express –

* Cash advance APR is increasing to Prime + 17.99%
* Late payment APR is increasing to Prime + 14.99%
* Default APR is increasing to Prime + 23.99%
* Foreign transaction fee is increasing to 2.7%

A summary of the changes made by Citibank –

* Purchase APR is going up to a minimum of 16.99%
* Cash advance APR is going up to a minimum of 21.99%
* Default APR is easier to trigger, and increasing to a minimum of 23.99%
* Fees for foreign transactions are increasing (new 3% transaction fee)

Click over to Credit Addict for complete details about the cardholder changes made by American Express and the rate increases by Citibank, along with information about how these changes will or won’t affect you.

Personally, I’m a big fan of life without credit cards.  I never have to worry about late fees or changes to my cardholder agreement.  Sure, there are hassles associated with a cash-only life, but I’d rather put up with those hassles than deal with another credit card payment!

If you are thinking about moving away from credit cards, may I suggest the Envelope System.  For those unfamiliar with this super-simple money management system, I’ve made a quick, four minute video tutorial, explaining the Envelope System and how I use it to manage my cash.  Check it out and let me know what you think.

For those who might be concerned about changes to your credit card cardholder agreement, you might want to visit your credit card company’s website or even give them a call and ask about any changes.  Also, you have the right to opt out of any changes they make, but they also have the right to cancel your account!  Be sure to visit the Credit Addict site and read more about details and how / when you should opt out.

11 thoughts on “Up, Up, And Away – Check Your Credit Card Statement!

  1. I’m glad they are finally doing this. Maybe this will finally convince people to quit using plastic. Living beyond your means (whatever your means are) is crazy. It will only get worse for you until you make drastic changes.

    When I graduated college (>20 years ago) I had >$50,000 on credit cards (don’t ask how or why…just think “stupid”!) Now I haven’t paid an interest payment to anyone in 5+ years, as a matter of fact the banks actually pay me a lot now in interest, but this wouldn’t have happened if it wasn’t for learning the lesson I did after college about debt.

  2. nope, my rates have been going down and my limits have increased. i guess responsible credit users are getting rewarded.

  3. Certainly doing without services they price so insanely would be wise. I just don’t do the things that they price ridiculously and pay off my credit card every month. I wouldn’t do business with someone that tried to rip me off that much – even if I were not foolish enough to get caught in there traps. It just seems like I shouldn’t have to fear the companies I work with. Credit Unions can provide much fairer deals (though not all do).

  4. Tim: The changes that Citi is making are across the board. It has nothing to do with responsible use. They’re taking a beating, and are trying to improve their bottom line by jacking up their interest rates. It has no effect on us, since we’ve never carried a balance, but it’s tough sledding for those that do.

  5. this just means that we all must be more responsible in using credit card like reduce impulsive purchases and really try to pay the minimum at least, if not the full amount every month… we don’t want be drowned in more debt..

  6. What a great post; this is exactly why everyone’s first financial goal should be to pay off their high interest credit cards. When you have a relationship with a company like these, you really are in a hole because they can always change the rates, etc on you and keep you in debt forever. Cut up your cards, or freeze them in a soup can for emergencies only, but stop using them. I agree- the card is only good for emergencies and should be paid off every month.

  7. I received a similar notice from Chase, I don’t recall the exact interest rate but it was significantly higher than it had been. Yet another reminder to not carry a balance.

  8. Just checked both of mine since you scared the heck out of me. Both are still the same and I have not received any mail informing me of changes. We had some financial difficulties over the last couple of years and are digging our way out. We have both of these cards. I would have to look into changing to someone else after I worked very hard with both to get the interest rates lowered. I will be keeping a close eye on them.

  9. @Biff B my bad, didn’t mean to scare you…. glad to hear nothing has changed for you… rock on w/ your debt reduction…

  10. Well i just got both my Citibank statements Biff B and both rates are changing. Mind you i always pay large sums not just minimum payments and my middle score on my credit report is 728. Luckily i only owe about $2,500 between the 2 so im paying the $500 off right away and shutting it down; the other card with the $2k on it i’m transferring to my chase card that has a 0% apr till may then 8.9. Citibank is going after its customers big time!!!

  11. Those numbers are kind of scary to look at, but if you don’t use cash advances, and pay our bill on time, then there isn’t really much to worry about.

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