Crafty Creditors Are Making Changes

This is a guest post from Tisha Tolar is a freelance writer providing content for CreditCardAssist.com, where she regularly writes about credit cards, rewards programs and general consumer finance issues.

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As the economy remains rocky and the credit card industry works through the crunch, it is important for consumers to take heed and pay more attention to what they are getting in the mail. Per law, credit card companies can change the terms of their issued credit cards provided they send notice 15 days prior to alert customers of the impending changes.

Due to the credit crisis, many credit card companies are resorting to different tactics to reduce their risks and increase their income in order to survive.

The Tactics

Some card companies are steadily analyzing customer accounts and dropping credit limits for the riskier clients, those who have been late with payments or have other debt. Even good customers are seeing their higher credit limits slashed up to half the original amount. Another tactic is the increase of interest rates. Back in the day, a customer was subjected to higher interest rates when they missed several payments. By today’s standards, a good customer can simply be late paying a debt other than the credit card and find their interest rates skyrocket, sometimes as high as 30%. It does not take long for debt and charges to accumulate, leaving you in even greater debt. Credit card companies rely on the fact that you don’t pay attention, thus making it easier to make money off of your lack of knowledge.

The Expectations

Credit card companies are fully aware that many customers will disregard written notices sent through the mail. It is common practice for people to skim over a contract, skip the fine print, and sign off without so much as a question. In keeping with that theory, the same people will likely toss privacy statements and notices beyond their monthly bill into the trash, without a second glance. It is only after that things have changed for the worse do customers sit up and take notice. Credit cards send out term changes and privacy policy changes essentially knowing the customer will not be looking very closely.

The Lesson Learned

The information we throw away often contains the important details about how the credit card company collects and uses our personal information, how our interest rates are calculated, and the regulations on fees and charges for late or missed payments and default. The statements also reveal the details of how the company reports your information to the major credit bureaus. It stands to reason that each and every customer would want to know and retain this information for future disputes. If you have to initiate a correction or an argument, it is best to know what you are talking about before jumping too far ahead. You can also help stop the sharing of your personal information with third-party sources.

In the world of credit, ignorance is not bliss. It can cost you dearly if you don’t know what is going on with your finances at all times. All too often we read of stolen identities or excessive debt brought upon by miscommunication or a misunderstanding. It’s your finances and your responsibility. Live up to them and live debt-free – or at least fool-proof.