This financial crisis has brought on a slew of bank failures, credit card divestment and general changes to the lending landscape. Already, 2009 has seen nearly 100 bank failures and numerous acquisitions and sales of credit card brands.
But how do all these changes affect your credit card? Let's take a look:
- The terms and conditions of your credit card may change if it is acquired by another bank. Please be on the look out for changes because they could affect how much money you pay to lenders in the long-run.
- Changes in interest rates. Sometimes, when a credit card is taken over by another bank, interest rates may change, most likely they increase. It's important to pay close attention to changes in ownership of your credit card for this very reason. If your credit card has changed issuers, give them a call and see if your interest rate is changing now or some time in the future. You don't want to be caught by surprise.
- Credit card limit cut. When a bank takes over a new credit card brand, they examine the portfolio to determine how the new customers and the credit card brand in general fits into their business model. In other words the look for the fat and trim it if necessary. This could mean that you face a credit card borrowing limit, new fees or a higher interest rate as mentioned above. However, new laws limiting a credit card company's ability to raise interest rates will prevent sudden interest rate hikes; but that rule only applies to credit card borrowers who are fixed rate customers and those who are not more than 30 days late on their credit card payments.