Credit Card Holders Slammed with Rate Hikes

Monday, February 23rd 2009, 7:50 pm
By: News 9

By Jennifer Pierce, NEWS 9

OKLAHOMA CITY -- Credit card companies are putting the squeeze on consumers. Millions of card holders have been hit with unexpected interest rate hikes.

About 24 million Capitol One card holders recently got a notice in the mail informing them their default rates would raise about five points.

Some consumers have seen double, even triple interest rate hikes.

"A five percent increase like that basically equals to $200 on my total credit limit, so that's a lot of money," credit card holder April Boghetich said.

Some people could sink deeper into debt if they pay their card late.

"If you are late just one time, they can raise your interest rate usually around 30 percent," said Jennifer Wallis of the Consumer Credit Counseling Service.

Wallis advises card holders to never ignore notices because there is usually a 30 day window to decline the changes.

If a card holder chooses to opt out of the new terms, they cannot use the card and may have to forfeit any rewards accumulated.

It's important to know that closing an account can hurt a credit score.