Your Credit Card APR Might Fall Starting This Sunday

Some Americans might be getting a break on their credit card interest rates very soon.

One of the three provisions of the CARD act going into effect this Sunday says that if your credit card company has raised your rates on you since Jan ’09, they have to revisit the reasons for the increase, like your overall risk, payment history and the general market. “If appropriate,” you could be in line for an interest rate reduction.

“This is the rule that could make a real difference for cardholders. Since January 2009, millions of cardholders have seen their interest rates increase. Some issuers raised rates to as high as 29.9% for cardholders with good credit. These higher rates shocked cardholders and they want their APR restored to the original rate,” Bill Hardekopf, CEO of LowCards.com tells Consumerist “However, the catch in this is two words, ‘if appropriate.’ The final decision is left with the card issuers. Credit card issuers need revenue and they may not be eager to review and restore the original rates.”

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  1. herbie says:

    Yeah, I don’t really see any card issuers spontaneously reducing rates…

    • Astrid says:

      Yeah, I haven’t called a card company about my APR in a long time so this has been a rude awakening. Since I made a late payment in January and my rate went up from 12.6% to 29.9%. At called at the time and was told that if I paid on time for the next 6 months that I should be able to get the rate lowered.

      Well, that was BS.

      I called last week and not only was I told that that’s not the way it works, the rep said that all their card members are on an APR rate freeze. (I didn’t even know that was legal….)

      I was then told that if, and when the freeze was lifted I had to wait for someone to review my account to see if there a better rate they could offer me. When I asked if I should call back in a month to see if my account could be reviewed I was told it doesn’t work that way.

      I literally said “So let me get this straight… I’m supposed to wait for a credit card company to voluntarily review my account and offer me a lower rate?”

      I guess I should also be waiting for hell to freeze over.

  2. chaesar says:

    they just raised my credit limit last month, is this a good sign?

    • Loias supports harsher punishments against corporations says:

      My bank did that to me without me making any prompts. I asked and they said they evaluated me themselves and determined I could have expanded credit.

      It freaked me out a little.

      • LisaLisa says:

        usually card issuers review everyone every month for eligibility in various offers/programs (credit line increase, change in APR, etc).

  3. Eat The Rich -They are fat and succulent says:

    In other news, CitiBank announced a total overhaul of their mortgage loan operation and is splitting into multiple “state” banks to improve customer contact and service.

    Also, large pigs have been spotted flying over Des Moines, Iowa early yesterday afternoon.

    More at 11.

  4. DarthCoven says:

    Not holding my breath…

  5. dragonfire81 says:

    Ok, as a red blooded male I have to ask: What in the world does this photo have to do with the article??

  6. dolemite says:

    Problem is, most of the stories we’ve heard here on Consumerist from people that have had their rates increased over the past 2 years involve nonsensical reasons. “It’s nothing you’ve done, it’s just the economy.” Which boils down to: “We are making a profit, but not an astronomical profit, so we are jacking your rate from 10% to 20%.”

  7. bairdwallace says:

    I was carrying a small balance for a while (I had no income at that time), and paying minimums. They jacked up my rate, and I found employment at around the same time, so I paid everything off. Since then, I have spent a *lot* for work, and paid it all off (I usually pay my bill 2 or 3 times a month to make sure the balance is zero at all times). My rate is still 29.9%. My credit score is pretty great, so I plan to call and ask them to reduce it. It irritates me to no end that I’m a pretty solid, long term customer, and my rate is as high as is legal. I can’t close the account, because it is the longest standing account I have, but I’m considering opening another, and not using this one anymore.

    Does your card’s APR impact your FICO score in anyway?

    • Loias supports harsher punishments against corporations says:

      No, APR does not effect FICO directly. How your APR effects how well you pay off debts will effect your FICO.

    • Green Beer Day says:

      I’d recommend you shop for a new card with a lower rate.

    • craptastico says:

      i’ve read here before (can’t link the source though) that even if you cancel that old card, that it wouldn’t leave your credit report for 6 months or something like that, which means your other accounts will be a little older, somewhat offsetting losing your oldest card. or you could just let it sit dorment while using another card.

      • Conformist138 says:

        Nothing leaves your report for several years, closed or not. You won’t lose your history, but your ratios will change for income vs available credit vs utilized credit, etc. Consumerist posted an article about how that is just bullshit to think that closing your oldest card will hurt your long-standing credit history.

  8. AgitatedDot says:

    Actually after Citi increased my rate to about 20% they reduced it to 4.4% and 5.4% (diamond and simplicity cards). Never asked for it. Just stopped using them. Now I use my Citi cards again.

  9. Warren - aka The Piddler on the Roof says:

    “The final decision is left with the card issuers.”

    In other words, disregard this article.

  10. Tim says:

    My interest rate has only gone down since January 2009, so this particular move won’t affect me.

  11. OwenP says:

    CitiBank raised the interest on my “I made a lot of mistakes in college” card to 29.99% in January. That’s the same as the default rate, only they raised it because I’ve carried a high balance since 2003 and managed to make at least the minimum payment since then. I called to complain, and the paraphrased was they were having trouble giving credit to new customers and I’d just have to shoulder the burden. Bull. I don’t care about new customers, I’m a long-time customer feeding them hundreds of dollars of interest payments per year.

    They offered me a “compromise”: for 6 months, they’d take 10% off of my interest payments. They didn’t explain that this is not the same as “you’ll have 10% less interest for 6 months” but I’m smart enough to interpret it as much worse.

    Incidentally, I got a balance transfer offer from Chase the next day. I’ve still got about 7 months of 0.00% APR on that, and the CitiBank account is closed. Citi’s sending me 2 offers daily now, but I don’t think I’ll ever do business with them again. Or maybe when the 0% runs out on the Discover I’ll transfer back…

    • Trollez says:

      Exactly. It is smart to take advantage of all the offers to transfer balances if you racked up some debt lately and are unable to pay them off each month. Look for the 12 months interest free on balanace transfers along with the lower transfer fee 2-4%. Then try to pay off as much as you can in the period of time. After that transfer it back to the card you transferred it from as they will offer you a similar deal once the balance goes to zero. I recommend paying in full on the initial purchase, but some times that doesn’t always happen in life.

      • craptastico says:

        i used to take advantage of these from time to time. unfortunately it seems like most of the offers lately have been for 0% for only 6 months, and they’re charging 5% for the transfer up front. effectively you’re still paying 10% annually. it’s better than 29.9% of course, but not as great as the offers used to be

    • Trollez says:

      Exactly. It is smart to take advantage of all the offers to transfer balances if you racked up some debt lately and are unable to pay them off each month. Look for the 12 months interest free on balance transfers along with the lower transfer fee 2-4%. Then try to pay off as much as you can in the period of time. After that transfer it back to the card you transferred it from as they will offer you a similar deal once the balance goes to zero. I recommend paying in full on the initial purchase, but some times that doesn’t always happen in life.

  12. Thyme for an edit button says:

    I canceled my two cards that raised my apr randomly (well, I refused their proposal to change my terms and that resulted in them closing the accounts.) BofA, interestingly, also wanted to raise my APR, but said I could write to them to reject the terms and they would not close my account. Needless to say, I rejected the increase.

  13. f5alcon says:

    my cards rate went up for no reason last year by 4%, i never carry a balance so i didnt care, but maybe mine will go back down.

  14. matt314159 says:

    And, do they “Un-cancel” your card if you got pissed off and told them to go to hell when they jacked your rate up to 29%?

  15. segfault, registered cat offender says:

    She’s kinda cute.

  16. shadowboxer524 says:

    My Amazon Chase card APR went up 5%, so maybe I’ll luck out and get my lower rate back…

  17. TasteyCat says:

    I see no problem with the rate increases. The banks were pushed into action by a ridiculous socialist bill that gave them a full year to do as they pleased, and do as they pleased they did. This could have been fixed at some point last year, but Congress wasted all of last year on the new healthcare taxes.

    • Eat The Rich -They are fat and succulent says:

      And that bill was the result of massive gouging and abuses by the credit issuing firms.

      Cause and effect. Do bad things to people, get your ass slapped.

      • TasteyCat says:

        Things like interest rates, fees, and minimum payments are irrelevant if people don’t live beyond their means. Buy what you can pay back. It’s really quite simple. People who use credit cards as an extra source of income should be fair game to be treated accordingly. Instead, now everybody has to pay the price because some people don’t know how to manage credit.

    • Shinsei says:

      If you really want to play partisan politics here, how about we bring up the eight years they had to run free prior to that, during which there were significant strides made in screwing up the overall economy to make a quick buck.

      Countrywide, anyone?

      • TasteyCat says:

        While the Bush administration and Congress on his watch (under both parties) certainly aren’t lacking for blame, let’s be honest. It may be convenient to blame Bush (Obama’s been doing it for 2.5 years), but the housing bubble began under Clinton.

  18. DraconWolfX says:

    While they may not automatically do it, they are. Citi jacked me up to 29.99% before CARD passed. I just called and got it lowered to prime +10.99%. Pretty huge discount. No arguing, no fighting. I just called up and stated I was unhappy with my rate and she told me she could lower it. Definitely give it a shot.