How to Dispute a Credit Card Interest Rate Increase

Credit card companies are known to increase interest rates regardless of your payment history, credit score or purchases. Consumers have long felt these practices are unfair and soon the law will change to reflect that. There are two types of interest rates on credit cards. A fixed rate means your interest rate is set for a stated period of time. A variable rate card will fluctuate with the prime rate. Credit card rates will almost certainly rise in the future. You have the option to ask for a lower rate or opt out of a proposed rate increase.

Instructions

1

Gather your past statements showing your payment history. Prepare for the call before you dial the phone. Do your research. Find out the current prime interest rate. Variable rate cards are based on the prime rate, plus a percentage. However, if your rate was set some time ago, the prime may have lowered since then, which gives you a bargaining chip to have your credit card rate lowered. Find an alternative card with a lower interest rate that you are willing to switch to if the current company will not lower your rate. Write down the card name and the interest rate. Understand your right to opt-out of the higher interest rate. Think about what you are going to say and write down your key points to keep you on track and in control. If you have received a notice of a rate increase (by law, the credit card company must give you 45 days notice before an increase takes effect) be sure to call before the deadline for a response. Keep notes as your conversation progresses.

2

Start the call by introducing yourself and asking the representative for his or her name. Write down the date and time of the call and the representative's name. You will be far more effective if you stay calm and polite during the transaction. If you have trouble understanding the representative due to a language barrier, politely tell them you are having difficulty with their accent and ask to speak to someone else.

3

Ask the representative for a lower interest rate. Explain your positive payment history and the length of time you've been with the company. Your agreement with the credit card company will state that your rate is a certain percentage over the prime rate. If your rate is higher than that, explain to the representative what your terms are, what the current prime rate is and ask for your rate to be lowered. If they will not lower the rate, or if you have received a letter of intent to raise your interest rate, tell the representative that you are willing to switch to another credit card company if your rate is increased (or is not lowered from its current standing.) If you cannot get a lower rate, your other option is to tell the representative you want to opt out of the rate increase.

4

Understand that opting out means you can no longer use your card. It also means you must pay off the balance of your card. There are a few different options for paying off the card. You may be able to continue the terms you've always had for payment. Unfortunately, the creditor does have the right to double the amount of the minimum payment you've been paying previously. The creditor may also give you a period of time in which to pay off the balance, and that could be as longh as five years. The one thing the creditor cannot do is demand you pay off the complete balance in full just because you chose to opt out. Negotiate for the best option you can get and write down the terms you agree to with the representative. In addition, ask the representative to send you the agreement in writing.

5

Follow up the phone call with a letter stating what took place during the call. Keep a copy of the letter. Mail it by certified mail with a return receipt requested so you have proof of delivery. Follow through with all the terms you have agreed to in the call.