Credit Card Rates have Risen for Poor Credit

Don’t own a home or plan to buy one anytime soon? Well, listen up because the fallout from the country’s mortgage problems could still affect you.

Several credit card companies in recent weeks have started to jack up rates for some customers, and other lenders are tightening standards for auto and personal loans.

Banks and lenders, for the most part, are not directly citing the national tightening of credit due to rising mortgage defaults. Most attribute the changes to generally tighter credit for corporations and individuals.

But still, lenders are taking a close look — whether new or not — at people’s credit, and that is pushing costs higher for some consumers.

The credit cards tie their rates to those set by the Federal Reserve and factor in the number of delinquencies. Since neither of those have changed, neither have credit card rates, McBride said.
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Bottom Line on credit cards:
It’s important to look out for minimum finance charges. Cards with these fees will charge you this minimum even if the calculated amount of your finance charge is less. For example, your finance charge may be calculated to be 35 cents — but if the company’s minimum finance charge is $1, you’ll pay $1.

There are numerous other fees to be aware of. They include an annual fee, cash-advance fee (either a flat fee or a percentage of money borrowed), balance transfer fee, late-payment fee and an over-the-credit-limit fee.

Todd Cook, president of Debt.com, offers some additional tips. To improve credit, he said pay more than the minimum payments on your credit cards and pay off the cards and loans with the highest interest rate first — not the ones with the highest balance.

[tags]credit, cards, credit score[/tags]

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