Credit Cards' Holiday "Reign of Terror"; Banks Rushing to Raise Rates and Fees...

[Purveyor]

(CBS) Your credit card company may be about to send you a holiday greeting. The cost of using your credit card is going up. Half of lenders plan to raise interest rates and reduce credit limits on their most qualified borrowers according to a recent survey by the Federal Reserve, reports CBS News correspondent Anthony Mason.

Sandy Knight of Dallas just received a letter from Citibank, increasing the interest rate on her card to 29.99 percent. She tried to fight it. But Citibank wouldn't budge.

"It's a crime. It's crazy. Total crime," Knight said. "So I said 'I really hope you sleep at night.'"

Says Adam Levin of Credit.com: "The reign of terror continues. They're doing what they do 'cause they can."

Levin says the banks are rushing to raise rates and fees before new federal guidelines on credit card lending go into effect next February. Fifty percent of Americans say their credit card interest rates have been hiked in the past six months.

"And the way the economy is, if you have a job and you make your payments and they jack up your rate, you will never get paid off. You will always be chasing the hamster," says credit card user Melinda Shelton.

So what is the lesson for the consumer?

MORE...

CBSNEWS: http://www.cbsnews.com/stories/2009/11/30/eveningnews/main5840809.shtml

[peacebird]

1. Pay off the card if you can, then only use it sparingly and pay off the total each month

If you can't pay it off - always pay as much over the minimum as you can manage and do not use it to charge more. If possible swap over to another credit card company - they usually give a low introductory rate for a year when you move your debt to them.

We are seriously rethinking our priorities and paying cash wherever possible. We also are buying from local mom & pops whenever we can, and avoiding bigbox stores so more of our money stays in our community.

[JackintheGreen]

3. We did this years ago

best thing I ever did.

Then we bought a house that wasn't exactly new and three times bigger than what we had been living in. It needed repairs and such, though not quite a handy-man special, and it needed some furniture. ut we'd spent most of our money on the house. Now we're back under the god-damned thumb of the credit industry. Makes me sick to think that I didn't learn a damn thing.

[virgogal]

2. The CC companies are truly evil and I have low balances,low interest,

and good credit.

They have tried a couple of sneaky stunts on me which fortunately I caught.

I despise them.