Skip Nav
Budget Tips
12 Personal Finance Moves You Should Make by Age 30
An Open Letter to the Boss Who Hazed Me
35 Work-Appropriate Halloween Costumes That Keep It Classy

Prepare For Credit Card Rates to Go Up

You've probably heard the news that Standard & Poor’s, a credit rating agency, downgraded the US from its AAA rating to AA+. How does that affect us, you might wonder. Well, many experts believe the lower rating will cause a rise in credit card interest rates of up to five percent. This change will only affect cards with variable interest rates because the Credit CARD Act of 2009 protects against rate changes for only fixed interest rates.  Here are three things you should do to protect yourself:

  • Check to see: Call your credit card companies to ask if the credit card you hold has a variable or fixed interest rate.
  • Put it on hold: Do your best to stop using the cards with variable interest rates or lessen your usage so you're not going to be shocked by the higher bill. You don't have to worry about the previous balance, the CARD Act will prevent banks from increasing the interest on your current balance. You just have to worry about your future transactions.
  • Don't panic: Don't get swayed by emotion and immediately cancel your credit card because that may have implications for your credit score. You may want to leave the credit card open because after you close it, the account history will be left on your account for ten years or whenever the credit card's issuer decides to remove it. Long credit history shows you're reliable and increases your credit score. Another drawback to closing your card: your available credit will immediately be reduced, impacting your debt to credit ratio, which significantly affects your credit score.
Image Source: Thinkstock
Around The Web
Join The Conversation
Credit Card Debt
What's the Difference Between a Debit Card and Credit Card?
How Much Salary Should I Ask For?
Best Ways to Work Abroad
7 Things You Can Do to Power Your Happy
Easy Ways to Make Money
Why Retiring on a Cruise Ship Is Smart

POPSUGAR, the #1 independent media and technology company for women. Where more than 75 million women go for original, inspirational content that feeds their passions and interests.

From Our Partners
Latest Career
All the Latest From Ryan Reynolds