Credit card issuers are beginning to abide by the new law on rate changes. This week, Citibank sent a notice to a cardholder letting them know they have until September 30th to decide if they want to continue using the card and pay a 29.99% interest rate, or “opt out,” closing the account for new purchases and continue paying the current 9.24% APR. With a $15,000 balance the difference is more than $3,000 per year in interest costs! Is any credit card worth more than $3000 in extra costs? Duh!
The notice informs the cardholder the new 29.99% APR will take effect on August 4th but the window for opting out and paying off the card under the current terms will close on September 30th. The new APR is prime + 23.99% with a 29.99% minimum interest rate. Under the new “Credit CARD Act” issuers are required to give 45 days notice before making changes and offer the cardholder an “opt out.” The new law will also limit the basis issuers can use to make a change.
Monitor your physical mailbox and your email for ANY notices from ANY of your credit card providers. The new credit card laws begin to take effect in September. Some issuers may use this diminishing time frame to “rate jack” you.