At least they're giving you an opt-out, which is more than Chase did a couple months ago.

I think Meg's suggestions at the end is brilliant.

So glad I'll have our cards paid off in the next day or two, then it will go into a cup of water in the freezer for good! (I'd cancel the card but I guess that's now a no-no...)

@Ash78: They have to. It's the law.

If you opt out and your account is closed, isn't that a hit against your credit since you are lowering the amount of available credit you have, as well as possibly shortening your credit history? And if your card is in good standing, won't removing a positive item on your report hurt you as well? This seems like a lose-lose situation. Maybe you could transfer the balance to another card with a lower rate and use that to pay it off?

I paid my cards off a year ago (thank God). Now I'm looking for the card that will give me the biggest rewards for funneling my purchases through them, and paying the balance in full every month.

@downwithmonstercable: Yeah, it's a loss any way you look at it if you have a balance on the card. You can pay more interest (obvious loss there), transfer to a new card (and hurt your credit score by closing this one or opening a new one), or just close the account and continue paying off (still hurting your credit score). I suppose you could just pay off the balance, but for most, that isn't an option.

@HurtsSoGood: Chase's version of the opt-out was "pay it all off right now" (ie, move the account). It was covered here about a month ago. I assume that's a legal option, but I'd imaging about 90% of balance holders were not in a position to do that.

They did not offer any continuance under the existing agreement to people who were on any sort of a "promotional rate" (which they used to offer 3-5 times per month, so it's a lot of people). I suppose that was their loophole.

This is why I've given up on credit cards (paid off and cut up a year ago). I don't have time to be super diligent and fight all these fees. If someone came up with a bread-and-butter card that guaranteed no dicking around, I'll be the first in line to sign up.

@HurtsSoGood:

No, they don't, it's a myth. They usually do, but the only opt-out they HAVE to provide is "pay off the card immediately and close it."

I haven't received it yet (In Canada), so maybe its regional.

@HurtsSoGood: I do that. I'm sure the company doesn't love me!

Citi tried this, too. I don't normally carry a balance, but sometimes I let a big purchase roll over until the next month. Their deal was that by declining the change, I could still use the credit card through its expiration date, at which point the account will be closed. Since in my case that's not until some time in 2012, I'm hoping that things will have improved enough that they'll still want me as a customer.

This was a paper mailing? I have a Capital One card but haven't received anything yet, either. I guess I'll keep an eye out. I think I caught that it said the changes won't take effect until the end of April, so everybody pay off (or pay down as much as possible) by then!

Everyone's already paying more interest. More interest on the higher national debt because of all the bailouts.

@balthisar: Citi pulled this same thing with me. I declined the change/opted out. Then a month later I called back and asked to close the card early, using the reason that someone had access to the card that I would rather didn't. The retention specialist said "oh, if you reopen the account I'll do a security closure for you and get you a new card and drop your interest rate!" I was pretty surprised. The new rate was lower than my original rate, the rate hike they had tried to give me before when I declined was no longer on the table, and now I get to keep my oldest card open at a low rate. (The card is 4 years old and I've never paid late/have decent credit, so that could be their reason for trying to keep me at a better rate, but this might be worth a shot for other Citi customers too.)

So if you don't want the increase, you can let them close your account for you? Um, no thanks.

I received it last week. My interest rate is going from 14.99 to 17.99%. The increase isn't as bad as other cards.

Wow, the enlarged image closing randomly sure is annoying.

@vladthepaler:

So all this money they're spending on bailouts, stimuli, etc. is actually hurting the everyday taxpayer.

Yet Krugman and his ilk will continue to bark "Spend! Spend! Spend!" at the masses.

This is yet another example of why Americans must pay down their debt and again regard credit as a last-minute, emergency resource.

Discover tried to do something similar to me, my card if a fixed 13.99 and they wanted to make it a variable rate which at the time was still 13.99 with prime and their locked option, but I called them and threatened to cancel and they left it fixed - with a letter in writing stating so.

That's the last card I have left to pay down - a few more months or less and I'll be worrying less about these things.

Capone *lowered* my interest rate in the past few months - I haven't changed anything in carrying balance vs. paying it off.

Maybe it's because my mortgage and other credit cards aren't in default...yet.

@HurtsSoGood: If you have a Costco membership, you should apply for their American Express card. Not only does it add to the warranty of any item you purchase with it, you get cash back rewards on gas, and I think retail purchases too. There might be miles involved also, but I can't remember.

@balthisar: I never thought I'd see the day when credit card companies would be trying to cut people out of their portfolios...

When Citi tried to double the rate on my Mastercard, I opted out and was told that I could keep using the card until it expired, May 2011. Is this not standard?

Looks like it is time to change my CC company. Can anybody recommend a good one that won't do crap like this or should I just stick to it since I generally pay off my balance every month?

@downwithmonstercable: Yeah, because American Express never cuts your limit or cancels your card out of the blue. I'm beginning to trust credit cards less and less these days. On the upside, my CapOne card got a recent credit limit increase and I'm still on 0% APR for the time being.

I felt so special Saturday morning. I picked up my mail (for Friday and Saturday from the mailbox. Included was this very same Capitol One Valued Customer letter, a similar letter from Chase telling me they had to increase my rates as well, and two (not one, but two) sets of convenience checks from Bank of America. I'm assuming the Bank of America rate increase letter will be forthcoming. Go, Economy!

I hate to say it but all the banks appear to be doing this. USAA sent me a letter a while back stating that they were changing their general credit card policy so that instead of the regular APR being tied to current interest trends, they now have a minimum APR rate of 7.75%.

I have good credit and had an APR of 5.5% in Jan. that has now jumped up to the new minimum rate. It's not too horrible, but they too gave you the option of 1)Accept the new rate, or 2) Pay your balance in full. My card's almost paid off so it's not going to kill me to pay a little more this month, that said, I'm still kinda pissed about it.

Luckily I paid mine off over a year ago. I left it as an open line of credit for no reason until now. I think I even shredded the card. Now Citi, on the otherhand, in 2 months it will be paid off, just in time for hospital bills =) I have, so far, been one of the lucky ones whose APR went down when "everyone else's" skyrocketed.

@Span_Wolf:

All CC suck in one way or another. Your best bet is to find a card that gives you the best rewards program and pay the bill each month.

We use 2 mainly: Amazon (Chase) because every $2500 spent gives you a $25 Amazon Gift Cert; you get 3x points using it on Amazon.

Costco Amex: 1% cash back at Costco plus up to 3% for gas/eating out.

If your CC bill is too big to pay off each month: You really need to look at what you buy. We did that and have cut 1/3 off our monthly expenses. This month we plan to have it down by 1/2.

The biggest problem is the way they're doing this. They should use a method that ensures the customer knows what is happening. This notice comes in an envelope that looks like the convenience check offers. Easy to miss.

People don't pay off their credit cards each month? Even 14.99% is murder.

@Design3r: At the rate things are going I'm sure the credit card companies will cancel the card for you after a few months of non-use.

I got this letter this weekend. I've had 5.99% FIXED ever since I got this card. Now it's going up to 15.99% APR. I have near perfect credit. Shame on them. Especially after getting $3 billion in tax payer funds. They shouldn't punish good customers for their bad lending practices.

@HurtsSoGood: two sites that find the credit card with the best rewards for you: Credit Card Tuneup and Credit Card Comparator. (The latter was written by me.)

Huh. Strange. They just lowered my interest rate to under 11% a couple of months ago. Of course, it's still got the highest interest rate of the three cards I'm paying off. Except they'll be getting a payment to take care of the balance tomorrow, so it won't matter much if they raise the rate. And to be honest, I'll still use them if I have to since they're the only card I have that doesn't charge a 3% currency conversion rate if I use it here in Europe (I should probably get a European card, but the only thing I've charged over here since August was my hotel room from when I visited Paris over Christmas).

@marzak: Me too! --One of the people who've seen their interest rates decrease.

After tomorrow, I'll have less than $4000 left to pay off - about 3/4 of it on a Discover Card at 7.7% interest until July (it'll be paid off by then) and the rest of it on a Citi card where they've dropped the interest rate down to 5.4%!

@aedude01: I got that one from USAA too, it made me sad because I had been down to about 7%. That's not a huge increase but still, sad that they had to do it at all since the best thing about a USAA card is their service and reliability.

I got a similar letter for my Discover card.

IMO Capital one is pure evil.

Years back when I had one. A bunch of times I was charged late fees when I had sent in my payment (via mail) at least 16 days ahead of time (well in advance).

I had a theory that capitol one had a special facility that held up the delivery to the main facility just so they can delay your payment so they can charge late fees.

Another fun little thing they did was when I paid it off & wanted to close my account.... they kept accruing interest (very small amounts like a few bucks) so I couldnt close my account. I HAD to actually guess at how much they were going to charge me & then OVERPAY that amount just to make sure. THAT finally worked.

like I said.... Capital one = evil.

This is all prep work for when the Credit Card Bill Of Rights kick in.

@forgottenpassword:

In addition. Capital one taught me a valuable lesson back then. To assume that all credit card companies are out to screw you over as much as possible & to never ever again hold a running balance (pay it off each month).

Note: I never really had any serious credit card debt (at most I owed maybe $2,000 on a single card, but paid it off quickly). I currently have no debt & live frugally.

LOL now I know why they jacked my rates by a few percent, despite never once going over my credit limit and always paying on time (and much more than the minimum, if that matters). I promptly transferred the majority of my balance off the card. Nevermind the fact that their stupid website was down half the time.

So much for all the "great customer service" and "competitive low rates".

@SudeepaLaevinus:
Good to know. Citi pulled the same thing with me and I opted out. I've had the card for over a decade and never been late.

Is it better to proactively close a card or wait until a card company closes it due to nonuse? I've had two cards close on me in the last 12 months because I never used them. I would've closed them myself but know that hurts your credit score.

@HurtsSoGood: Me too. I got the Speedway MasterCard since I buy most of my gas there. I cashed in some points the other day for a GameStop giftcard to buy the dvd remote for the PS3 I just got. (Yay!) There are a few other things I can cash the points in for like gas gift cards.

I received the same style of notice, but the only rates increasing in my case were the "Cash Advance Rate" and the "Default Rate". So... in my case it matters little. I don't take cash advances on credit cards nor will I miss payments. In fact, unless have a promotional interest rate (read low interest or no interest transfer balance on a card)... I always pay the balance off in full every month on all my cards.

Regardless, apparently this notice isn't the same for notice everyone who receives it.

@CapitolStorm: American Express has cut my limit three times in as many months. Everytime I pay more of the card off my limit falls within $50 of my balance. Which is awful, because I went to use the card at a hotel while I was travelling and was declined.

The card limit had been reduced four hours earlier. I didn't even get a chance to get the e-mail.