With the economy showing little sign of improvement, many credit card companies are taking measures to cut costs. Almost everyone uses a credit card these days. So when credit card companies take action to cut their losses or increase their revenue, it will inevitably and some of their ways of doing so affect credit card holders like you and me. Here is what credit card companies tend to do when they want to increase income and avoid bankruptcy:
• Reduce your credit limit
• Increase their interest rates
• Impose higher annual fees
• Increase minimum payment amounts
• Cancel credit cards of inactive holders
Credit card companies are not fond of inactive customers because not only do you not earn money for them but they do not want to be used to pay your expenses if you lose your job (then you become a bad risk to them). If you have been subject to some or all of the above, it may have an adverse effect on your credit score. Worse than that, it may jeopardize your own financial standing.
So here are some things you can do to stay on top of things:
1. Pay of 100% of your credit card debts and control your credit thereafter. By bringing down your credit card balance to zero, you will not be in danger of financial problems should you get laid off.
2. Use your credit card for small purchases, enough for you to pay off each month. This shows the credit card company that you are an active user. Of course, you will always be presented with the latest discounts and promotions of the credit card company but you should resist the temptation to overspend on credit.
3. Keep track of all your credit cards statements and see if there are changes in the credit card company’s Terms of Service. When changes do not suit you, you should bring it up to your credit card company for discussion.
4. If the credit card company increases your interest rate, negotiate with them to pay your balance under the previous (lower) rate.
If you are drowning under heavy credit card debt, you may want to consider filing for bankruptcy protection. Bankruptcy protects you from all collection efforts of credit card companies and other creditors while you work to pay off your debts.
Call us at (813) 200 4133 for a free consultation on bankruptcy.