THINK YOU’RE GETTING AN INTEREST BREAK? 

READ THE FINE PRINT. 

Last post, “Agent 0016″ wrote about the CIT (Changes In Terms) notifications that credit card customers are receiving. Most are having their rates raised in May. Yet, some  customers are getting a bit of a break. Their rates are going up, but not right away. These customers are not having their rates increased until March of 2010. 

SAME OPT-OUT DEADLINE FOR EVERYONE

However, customers who want to opt out of future interest rate changes that will take effect in March of 2010 have to do so by April 17th, 2009, the same date as customers whose rates are being increased in May of 2009. 

A CUNNING PLAN?

Doing it this way certainly makes it trickier for the customer in that this procedure goes against all precedent. So is it a cunning plan to retain customers now, in order to lock them into higher interest rates for the future?  

After all, the customer has to make a decision now that will effect  his or her credit card interest almost a year from now. This calls for long-term planning that so many of us, myself included, prefer to put off. 

Who knows or cares what will happen a year from now? Who feels any urgency about it? 

This extension of their lower rates may lull customers into a false sense of security, only to forget about the increases until they show up on their statements.  

Yet, credit cardholders who forget about the increases, and who don’t pay off their cards before the changes take effect, may find themselves trapped in high-interest debt. 

WHAT ABOUT THOSE WHO OPT OUT?

Those who opt out now from the changes scheduled to take place in March 2010 will have a different set of issues to deal with. They will need to prepare for the fact that, a year from now, their credit cards will be restricted and their accounts closed for everything but repayment. 

Since 2010 calendars are not yet printed, how do you mark your calendar for this? And how do you prepare for it? If your strategy is to pay down your accounts and close all but one, is it possible you will wind up without any credit card at all? If so, when do you shop around for a new card? Now would be too early. 

And what if Congress passes credit card legislation that caps interest or rolls it back to your original agreement? You might see interest rates on the account go down in a year so that you wouldn’t have had any trouble with keeping your account open as you paid off your balance.

It’s impossible to predict the future, which is why so many of us put off financial decisions that are not cut and dried. 

Yet, put off this decision for too long, and the deadline will pass so that you will have made your decision by default. 

Bottom line, it’s a pretty safe bet that some customers whose credit card interest rates will not increase until March of 2010 will miss the early deadline for opting out of those term changes, and not find out about it for a year.

CONCLUSION: WATCH FOR & READ CIT NOTICES 

So here’s today’s financial advice for your credit card.

Credit card companies are mailing out a CIT (change in terms) pretty much to everyone, so be on the lookout for yours. (And, again, you will get only one notification per account.)

Open every piece of mail you get from your credit card company, and read all that fine print about dates and rates carefully.

Lastly, if there is anything at all you do not understand, call your credit card company and have it explained.

Regardless of whether it occurs now or a year from now, I’m sure you do not want a nasty surprise.