Why did my credit card rate go up?

You have good to perfect credit, a high FICO score, and you haven’t made any late payments to any creditor. Why the surprise when you open your statement and your credit card company gives you an unwanted gift in the form of higher rates, higher minimum payments, lower credit limits, and of course higher fees? It doesn’t make sense since you have employed all the techniques to get the credit you deserve. Certainly you don’t deserve this credit card company snub!

We recently had legislation pass by Congress and that is why your rate has gone up. It has nothing to do with your FICO score, credit report, or any changes in your “credit profile”. It is simply the banks and credit card companies wanting to maximize their profit and they don’t want to lose the opportunity to take advantage of you. They certainly don’t care about offending you. It is all about their bottom line and it is a preemptive move by the credit card companies.

Washington Post:

Credit card companies are raising interest rates and fees seven months before new rules go into effect that will limit their ability to do so, much to the irritation of Congress and consumer advocates.

Chase, for instance, will raise the minimum payment required of some of its customers from 2 percent to 5 percent of the statement balance starting in August. Chase and Discover have increased the maximum fee charged for transferring a balance to the card to 5 percent of the amount, up from 3 and 4 percent, respectively. Bank of America last month raised the transaction fee for balance transfers and cash advances from 3 to 4 percent. Card issuers including Bank of America and Citi also continue to cut limits and hike up rates, which they have been doing with more frequency since January.

“This is a common practice and will continue to be common, because issuers can do these things for really no reason until February,” said John Ulzheimer, president of consumer education for Credit.com, which tracks the industry. “It’s what I call the Credit Card Trifecta — lower limits, higher rates, higher minimum payments.”