Having a credit card problem? Here's help

Herb Weisbaum • Profile • E-mail

Credit card companies are reacting to the sour economy by putting the squeeze on their customers. Do anything to lower your credit score and you can expect to see your interest rate go up, your credit limit lowered, or both.

“Issuers today are much quicker to pull the trigger on their consumer with average or poor credit scores,” says Bill Hardekopf of LowCards.com. “They are trying to reduce their risk by taking a very hard look at customers who do not have good to excellent credit.”

To keep this from happening you need to pay all of your bills on time, pay more than the minimum on your monthly credit card statements, and keep a low balance on your accounts.

From the e-mail I get, there is a great deal of confusion about credit cards.  Here are some answers to the most frequently asked questions.

How many credit cards should I have?
There’s no magic number. It all depends on how disciplined you are. Some people can handle a few credit cards, a couple of store charge cards and a gas card. For others, the temptation to overspend is too great.

“For most families, two credit cards are probably sufficient,” says Ruth Susswein, a credit card expert at Consumer Action. “One card is for general expenses and the other is for emergencies.”

The ad promised a great interest rate, but when I applied for the card my rate was much higher. What gives?
Only people with good to excellent credit scores – currently that means 720 and higher – will get those advertised rates. If you have a lower score, your application will be rejected or you’ll be offered a card with a higher interest rate.

Is there a law that says how long the grace period must be?
No. Some cards still give you 30 days to pay, but a grace period of 20 or 25 days is more common. And that can be changed at any time. Always check the due date when your statement arrives. In some cases, you may need to pay that bill as soon as you get it in order to avoid a late fee. Your card company is required to mail your monthly statement 14 days before the payment is due.

The interest rate on my card just went up for no apparent reason. What should I do?
If you have a good credit history and have paid your bills on time, contact the card company and ask them to lower the rate. “Call their bluff,” advises Curtis Arnold of CardRatings.com. “Tell them you’re not going to stand for this and threaten to take your business elsewhere. A lot of times you can get concessions.” If they refuse to budge, it’s time to look for another card.

MORE FROM CONSUMERMAN

ConsumerMan Section Front

Are holiday lights a hazard? The great rebate debate Clean clothes, stinky problem Fed overdraft rule not enough Chinese drywall a big threat FTC nabs Moneygram ConsumerMan Section Front   Add ConsumerMan headlines to your news reader: