How to improve credit terms

When Congress passed the credit card reform act known as CARD many people breathed a sigh of relief, hoping that accountability and responsibility would soon be coming to the credit card industry.

Unfortunately, instead of bringing sunshine and rainbows to the credit card industry, the CARD act has only hastened the ascent of interest rates and fees; causing 56% of consumers wanting Congress to move the Credit Cardholder's Bill of Rights up to December.

In fact, a recent survey by Credit.com shows that 45%, an increase from 33% over June, of consumers have felt the negative effects of the credit industry's grasping for extra cash in one of the following manners:
  • Increased their interest rate 27% (up from 15% in February survey)
  • Increased their fees 19% (up from 14% in June survey)
  • Lowered their credit limit 17% (up from 8% in February survey)
  • Increased their minimum payment due 17% (up from 12% in June survey)
  • Reduced their rewards program 12% (up from 9% in June survey)

But even a move to December may not protect consumers from the push to pile predatory practices in before the new law is put into place. Wells Fargo, for example, is on record as stating that it will increase rates on most cardholders by 3% on Nov. 30, the last day allowable before the new law would go into effect.

Since it's obvious that the best intentions of our legislators and the consciences of those running credit card companies cannot save you from a credit crisis, we spoke with Adam Levin, a consumer expert with Credit.com, to find out what you can do to keep your credit safe.

The first option that Adam gave for consumers who have been hit by increased fees and rates is to "jump ship" and go looking for another credit card company with more favorable terms. But Levin was quick to caution that you, "Always keep in mind your credit history. If it's your oldest card, closing it could impact your credit score."

In that case, one option would be too keep the card active but without a balance. If, after weighing your options, you decide to get a new credit card Levin suggests checking out credit unions and local banks, which both typically have lower rates.

Another option consumers have if they are on the wrong end of a change in terms is to call their credit card company and ask for things to go back to the way they were.

"If you have a great credit score, call," Levin said. "Ask for a supervisor and point out your history." However, he cautions that this is only to be done by people with good credit, telling WalletPop in a phone interview that, "If you're having credit problems you don't want to draw attention to your account."

Most importantly, if you want to make sure your credit is safe from an industry that Levin describes as, "never meeting a fee they didn't like," and, in a state of "Rate Rage," there is something you can do.

"One thing that's important always, but now more than ever, is to spend 5-10 minutes a day looking at your accounts for identity theft, what your spending; just checking your account," Levin said. "Nobody has the interest in your financial safety that you the consumer has."

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