Some are tempted to ditch their increasingly expensive credit cards
November 4, 2009 – 7:27 pm Ever since Congress approved reforms that will affect fees and interest rates millions pay on their credit cards, some companies have responded by developing new ways to boost their profits.
However, the trend has some consumers using their debit cards or cash more often while paying down credit balances, or simply canceling their accounts altogether.
A recent Wall Street Journal report cites one expert who predicts that up to 15 percent of credit card accounts will close in 2010, more than half of them closed by lenders because of delinquencies.
With that in mind, the newspaper noted that current trends in the credit card industry make this a good time to consider whether a particular card is worth keeping. However, consumers also need to weigh factors such as the possibility that ending an account could harm one’s credit score.
Instead of simply canceling an account, some consumers may find it more in their interest to pay down the balance and keep it open, using it for occasional small purchases. This especially makes sense if it is an older card, since the age of an account, as well as the available credit it offers, are significant factors in determining a credit score.
Consumers may also have the option of contacting their card company and asking them to roll back a recent interest rate hike or restore a lowered credit limit.
Companies may not be as inclined to accommodate customers as they once were with such requests, especially considering the current economic climate. Another factor is looming changes to credit cards that could be implemented in as soon as a few weeks from now if some members of Congress have their way.
Similar Posts:
- Offers for credit cards sent through snail mail increase in 4Q of last year
- Understanding Credit Card Cancellations
- Consumers should educate themselves about credit cards
- Consumers Union asks Fed to take action on credit card debt practices
- Credit card companies said to be exploiting loopholes in federal law
