Dear Liz: I took advantage of a 4.99% fixed-rate balance transfer offer a couple of years ago. I just received a notice from the issuer that it was increasing my minimum payment from 2% to 5%. Clearly, I’m not profitable enough, and now it’s seeking to get rid of me fast! Suggestions?
Answer: Many borrowers who have low fixed rates will probably lose them or see their terms change in coming months as credit card issuers cope with higher defaults and new federal regulations.
You have several options, none of which you’ll like:
- You can pay off your balance at the new, faster rate, which will get you out of debt fairly quickly while preserving your current rate (unless your issuer changes its mind about that too).
- You can transfer your balance to another low-rate offer, which probably won’t be fixed and may not last very long.
- You can default on your debt if you can’t afford the payments, which would trash your credit.
- You can learn that carrying credit card balances always has been and always will be a sucker’s game.
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