Ann has $10,000 in credit card debt. She was paying it off at an interest rate of 7.15 percent. “Then all of a sudden, when I received my September statement the APR had jumped to 14.99 percent,’’ Ann wrote to me. So she called the credit card company.
There was no mistake. Ann joined millions of other credit card users who have been notified that their interest rates are rising. They, like Ann, are being told to deal with it or get kicked to the credit card curb.
Ann has two choices. She can accept the higher interest rate, but she would only be able to make the minimum payment. Or she can reject the rate hike. But if Ann says “no deal,’’ the credit card company has told her it will close her account.
Under the new Credit Card Accountability, Responsibility and Disclosure Act of 2009 and Federal Reserve rules, a cardholder who is notified of a change in terms on or after Aug. 20 has the right to reject that change for the existing balance. If the consumer does so, the credit card issuer must either allow the cardholder to repay the balance …
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