Your Guide to Credit and Personal Finance

You don’t always have to accept higher credit card fees

By Bridget Smith - Editor-in-Chief, Smart Borrower Center

Do you take time each month to read through everything you receive from your credit card company? You should! If you don’t, you could miss out on important information about changes that aren’t in your best interest. And you could miss the opportunity to do something about them.

If you’re like me, usually you weed through that bulky envelope you receive each month, pull out your statement and chuck the rest into the trash. But be careful, those extra sheets may be more than just junk mail. While it’s all very well to toss out the ads, you should read any information coming directly from your card issuer.

I recently received a “Notice of Change in Terms, Right to Opt Out and Information Update” from my card company. The fine print was somewhat confusing but the net result seemed to be a rate increase. So I called the toll-free number listed on the statement and requested to opt out. The representative on the other end of the line, however, tried to talk me out of it. She assured me the changes would benefit me. So I agreed to dig out my current card agreement and compare the two.

Sure enough, when I checked the proposed changes against my current agreement, I discovered most of the fees were increasing by $10, and the default interest rate maximum was going from 23.99 percent to a whopping 28.99 percent! So I called back a second time. Once again, I got through to someone who tried to prevent me from opting out. This person was more upfront about the changes, but warned me that if I chose to opt out, they would close my account.

Again, it’s important to read the fine print. According to my agreement, they can’t close my card “until the end of the year, or the expiration date, whichever is later.” Well, my expiration date isn’t until 2008, so I’m not worried about the card closing. And I have a hunch when the time comes, they’ll figure out a way to keep me as a customer.

I’d be tempted to close the card myself, but I’ve had it for just a few months, and opening and closing accounts can hurt your credit score. Instead, I’ve taken my chances and exercised my right to opt out of their proposed changes. And I plan to use the card only when absolutely necessary.

The lesson I learned from all this is that you need to do more than simply shop around for the best credit card deal. You also need to stay on top of that deal. Keep track of everything they send you. If you don’t, your low introductory rate or reward benefits may change without your knowing. As a consumer, you should question anything that doesn’t seem right. And you can fight back!