Pay extra attention to your credit card statement. Look at the interest rate you’re being charged.

If the credit card company is like most, it’s charging you more.

At our home we were paying 7.9 percent. One day we noticed the interest had soared to 14.9 percent. We didn’t notice the higher interest in fine print until the second month.

It’s happening all over, said Jackie Wiegleb of Consumer Credit Counseling Services of Maine.

“A lot of credit card holders are receiving new terms of agreement. The interest rates are being increased. Some are going from fixed to variable rates.”

It’s nothing consumers have done. Wiegleb’s credit card interest rate went up, too. “It’s the aftereffects of the credit card legislation,” she said. Credit card companies “are making those changes before the bill goes into effect. They’re looking at reduced revenue streams” from more restrictions in the Credit Card Act of 2009 passed by Congress.

Most of the new credit regulations take effect in February. Some of the new consumer protections include requiring card companies to give cardholders a 45-day notice of an interest rate hike and the right to “opt out” of the higher rate by canceling their card and paying the balance at the old interest rate. Card companies will also have to make statements available 21 days before the next due date, up from 14.

The law also requires issuers to consider a consumer’s ability to pay when issuing cards or increasing limits, and requires companies to disclose how long, and how much, it will take to pay off a card when only the minimum payments are made.

Credit card companies switching consumers from fixed to variable rates may not be a big deal “if the primary is low, but as soon as it increases, and we would expect it will, the interest will go up,” Wiegleb said. “So there’s a feeling of unknown with it.”

Another trend is credit card companies are decreasing credit limits, which can create a negative impact on individual credit scores, Wiegleb said. “It looks like you’ve charged near your limit.”

What to do? First, be aware. Read your statements, your mail. “Consumers have to watch their notices carefully,” said William Lund, superintendent of the Maine Bureau of Credit Protection. Consumers should get a notice letting them know of new terms: higher interest or variable rates.

If you’ve been socked with higher interest or a variable rate, try to pay down the balance, and shop around for a better deal. Lund recommends going local. “There are deals to be had locally.” Check at local savings banks and credit unions, he said. “Credit unions have come out in the forefront with lower rate credit cards,” Wiegleb said.

Higher credit card rates seem to be a side effect of the new consumer law, Wiegleb said. “It’s one of those unknowns out there when you put a new law into effect.” Overall the law will help consumers, she said. Those who shop around and get a new card, “at least you know there’ll be really good rules in place.”

Higher interest rates and more information on the true costs of credit “may help motivate people to prioritize paying down those debts when they see ‘this is what it’s really costing me,'” Wiegleb said.

For more information about the Credit Card Accountability Responsibility and Disclosure Act of 2009, go to: http://files.ots.treas.gov/25308.pdf


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