Credit Cards' Holiday "Reign of Terror"

(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?

"Well, the first lesson is pay attention. Anytime you get a notice on anything read it," Levin says.

Many are heeding that advice. The National Retail Federation expects credit card usage to fall 10 percent this holiday season.

"Many people are really coming to stores with the amount of money they have in their wallet, saying 'this is all I have to spend.' And that's going to affect the impulse buy," says NRF's Ellen David.

That could make it a tougher holiday for borrowers and retailers both.

So what can you do if you get one of these letters raising your interest rates?

You have the right to opt out - meaning you can pay off your balance at the old interest rate. But, Mason says, you have to give up the credit card and that could affect your credit rating.

[fredesterly]

One should be having a deep knowledge about the use of credit card, before start shopping with the credit card. What if the things meant for easing out your life start giving trouble to you. If you are reluctant to pay off high interest rates, you can inquire your bank for the other options,which are less heavy on your pocket.

<a href="http://www.debtsettlementlink.com/" title="Debt Settlement">Debt Settlement</a>

[shafiq11]

<a href="http://woolwichcreditcards.com" rel"dofollow">Credit Cards</a>

[shafiq11]

<a href="http://woolwichcreditcards.com" rel"dofollow">Credit Cards</a>

[shafiq11]

hi,that causes the credit card reform bill act to be dead on arrival.he fundamental truth of credit cards. Financing consumer purchases at loan shark rates is the financial death nail of this country. Consumers have been taken.it's fine.
===============
Smith

<a href="http://woolwichcreditcards.com" rel"dofollow">Credit Cards</a>

[kinoshika]

I appreciate the concern which is been rose. The things need to be sorted out because it is about the individual but it can be with everyone. This conversation is going no where. It?s lacking the place of a good leader to head the things to come out on conclusion.
==============================================================
[url="http://yourfinancesoftware.com" rel="dofollow"]Finance Software[/url]

[kinoshika]

I appreciate the concern which is been rose. The things need to be sorted out because it is about the individual but it can be with everyone. This conversation is going no where. It?s lacking the place of a good leader to head the things to come out on conclusion.
==============================================================
<a href="http://yourfinancesoftware.com" rel="dofollow">Finance Software</a>

[kinoshika]

I appreciate the concern which is been rose. The things need to be sorted out because it is about the individual but it can be with everyone. This conversation is going no where. It?s lacking the place of a good leader to head the things to come out on conclusion.
==============================================================
<a href="http://yourfinancesoftware.com" rel="dofollow">Finance Software</a>

[kinoshika]

I appreciate the concern which is been rose. The things need to be sorted out because it is about the individual but it can be with everyone. This conversation is going no where. It?s lacking the place of a good leader to head the things to come out on conclusion.
==============================================================
<a href="http://yourfinancesoftware.com" rel="dofollow">Finance Software</a>

[CreditCardBailout]

Althought the credit card bill is a small step in the right direction it does not change the fundamental truth of credit cards. Financing consumer purchases at loan shark rates is the financial death nail of this country. Consumers have been taken in to the thought that financing everthing is smart, hey businesses do it. Businesses leverage debt for prudent investments based on careful calculations (unles you're AIG or GM). Consumers using credit cards will never become wealthy.

I echo all the posts that say dump your debt today. Yes, I'm passionate about this which is why I work with CreditCardBailout.com where consumers who have gone late on their credit cards have an opportunity to settle out their debts at a deep savings during this economic down turn. It's a HARDSHIP program only, not for anyone who can pay their bills. Go check out the free calculator and see how much your debt could be reduced by.

Credit card companies have been beating us for years, lets take this opportunity to eliminate the debt cut up the cards and put these guys out of business.

Jacob - Credit card free for 9 years and counting!

[JayAdler1]

I will say something that is disputed, do anything you can to pay these people off, put all your cards in a file and when you get to zero chop then up. My family for a few years only has used debit cards and mostly cash. My grown and working kids for some reason always did that and still do. When we were finished my wife and I were left with a 798 score which we did not need but thank you. You will feel so much better when you get rid of your credit cards and the debits do not take up your postage,your hold time, letters and guff.

[edgy44]

If you are paying interest on a credit card, you are a loser. A credit card is a purchasing tool, and has to be paid off every month.
I've had a credit card for 35 years, and have nevr paid interest. If I need long term cash, I go to the credit union and get a signature loan. Better yet, sell the stuff you no longer use for cash.