As more credit card consumers make use of the credit lines, some companies are taking the opportunity to increase their interest rates. Many credit card consumers don't realize that they may have the right to "opt-out" of an interest rate hike in most cases. The first thing credit card consumers need to know is that although the current law governing credit card companies does NOT REQUIRE that companies allow consumers to close their variable rate account and pay off the balance under the old rate, many companies do provide this option VOLUNTARILY. However, credit card companies have specific rules governing how consumers can opt-out of an interest rate hike.
Here's what you need to know:
#1 - You must keep a close eye on your credit card statements. Once a credit card company institutes a rate hike they will announce the increase and give you instructions on what you need to do if you don't agree with the rate hike. This usually means that they will provide an "opt-out" window of time.
#2 - Write a letter to the credit card company telling them that you want to opt-out of the rate hike. This will require that you pay off your entire balance (most likely immediately) under the old interest rate. Speak with the credit card company to find out how much time they are willing to give you to pay off the balance. Most likely it won't be more than 30 days, and that's if they are feeling generous.
#3 - Remember, if you pay off your credit card balance each month you will never be affected by interest rate increases.