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Question:
This
is follow-up information on a previously discussed
topic, the impact of the subprime mortgage situation...
A
BuyandHolder
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Answer:
Dear
BuyandHolder,
This
is follow-up information on a previously discussed
topic, the impact of the subprime mortgage situation.
In that column, we suggested the possible results
it might have on the market.
But
now we're just beginning to see new developments due
to the fact that many of the nation's banks are facing
significant loan losses because of delinquencies -
primarily mortgage delinquencies but also delinquencies
on automobile and truck loans.
The
result is that banks across the nation are trying
to cushion these losses by raising credit card fees
-- late fees, ATM fees, this fee, that fee. They are
also increasing interest rates on unpaid balances
and cash advances.
Keep
in mind that credit card companies can change interest
rates at any time. They do not need government permission
to do so.
Some
credit card issuers are even slapping on penalty rates
if you make late payments to another creditor! That's
because many lenders re-set rates based on the individual
consumer's credit score.
Another
means banks are using to bring in money is by charging
a fee for transferring balances from other cards.
Some are even shortening the so-called "grace period."
That's the time frame during which you can pay your
credit card bill without incurring interest charges.
It typically has been 30 days, but in some cases has
been squeezed down to just 25 days.
Protective
Tips
Negotiate.
First of all, if you have a good credit history, negotiate.
Call your current credit card company; let them know
you are thinking of leaving. They may take action
to keep you as a loyal customer who pays bills on
time.
Shop
around. Next, check various credit card interest
rates and fees at www.bankrate.com
and www.lowcards.com.
Read
the fine print. Banks are required to notify you
of changes in fees and rates. But they tend to do
so in very small size print. If you're uncertain about
any fee or rate, call the customer service number
on your card.
Good
luck!
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