{"id":7830,"date":"2009-08-17T20:00:45","date_gmt":"2009-08-18T00:00:45","guid":{"rendered":"\/\/www.askmrcreditcard.com\/news\/?p=7830"},"modified":"2009-08-17T20:00:45","modified_gmt":"2009-08-18T00:00:45","slug":"what-you-can-do-about-rising-aprs","status":"publish","type":"post","link":"https:\/\/www.askmrcreditcard.com\/news\/what-you-can-do-about-rising-aprs\/","title":{"rendered":"What You Can Do About Rising APRs?"},"content":{"rendered":"

Before, the passage of the Credit Card Bill of Rights, many people made all sorts of predictions, both reasoned and fanciful.\u00a0\u00a0\u00a0 Among the more reasoned predictions was that interest rates would go up, and that credit card fees would increase as well.\u00a0\u00a0 I have argued<\/a> that credit card fees have not gone up, despite some questionable news reports to the contrary.\u00a0\u00a0\u00a0 On the other hand, it seems incontrovertible that APRs are going up.\u00a0 For some evidence of this trend, look here<\/a>, here<\/a>, and here<\/a>.<\/p>\n

The question is, what can you do about it?<\/p>\n

Pay Off Your Balance<\/strong><\/p>\n

This seems completely obvious, so I won’t belabor the point.\u00a0\u00a0\u00a0 My writing in this blog has been full of convincing arguments why carrying a balance on your credit card is a bad idea.\u00a0\u00a0\u00a0 Well, now it is worse.\u00a0\u00a0 Undoubtedly, there are some situations in which people have reached rational conclusions in which credit card debt was their only option.\u00a0\u00a0\u00a0 With APRs shooting up, it is time to rethink that option.<\/p>\n

I would seriously consider looking to other ways of borrowing in order to retire your credit card debt.\u00a0\u00a0 I won’t recite a list of ways to save money, that is well covered on the internet.\u00a0\u00a0\u00a0 What I would suggest is that you look at major financial maneuvers to retire your debt at once.\u00a0\u00a0 If you own a home, getting a home equity loan is a good start.\u00a0\u00a0\u00a0 If you qualify, home equity rates will be much lower than where credit card rates are going.\u00a0\u00a0\u00a0 Another option would be the cash out refinance.\u00a0\u00a0\u00a0 It is like a home equity loan, but it is essentially a one-time deal.\u00a0\u00a0\u00a0 In either case, the interest that you pay on a loan for your primary residence will be tax deductible.\u00a0\u00a0\u00a0\u00a0 Credit card interest is not.\u00a0\u00a0\u00a0\u00a0 The downside is that, of course, you will have less equity in your home.\u00a0\u00a0\u00a0\u00a0 To make up for that, you can easily add to your mortgage payment what\u00a0 you had been paying to your credit card company.\u00a0\u00a0\u00a0 The money that is added to each payment will go towards your principle, and you will come out ahead in the end due to both the lower interest rate and the tax detectability of the interest.<\/p>\n

Restructure Your Assets<\/strong><\/p>\n

That is a fancy way of say, “sell something that is not worth the cost of your credit card interest.”\u00a0\u00a0\u00a0 It might be a boat, a car, or some other valuable object.\u00a0\u00a0\u00a0 Either way, decide if your ownership of it is worth the amount of money that you are paying every month on your credit card interest alone, after your rates have gone up.\u00a0\u00a0\u00a0 Another way to knock this off in one big blow is to eliminate an anticipated expense.\u00a0\u00a0\u00a0 Cancel a vacation or postpone another major purchase.\u00a0\u00a0\u00a0 What made sense when your interest rate was 7% might not make sense at 27%.<\/p>\n

Ask For A Lower Rate<\/strong><\/p>\n

When it comes to credit cards, it never hurts to ask.\u00a0\u00a0\u00a0 If you have a good payment history, your bank may be able to lower your rate just by asking.\u00a0\u00a0\u00a0 The worst they can say is no, so why not give it a try?<\/p>\n

Shop Around For A New Card<\/strong><\/p>\n

Even with spiking interest rates, the credit card market in the United States remains vibrant.\u00a0\u00a0\u00a0 If it were not, you wouldn’t see so many companies trying so hard to get you to apply for their credit cards.\u00a0\u00a0\u00a0\u00a0 Now may be the time cancel your card and look for better offers.\u00a0\u00a0\u00a0 On the other hand, there will be other companies raising their rates in advance of the February implementation of the provisions of the Credit Card Bill of Rights.<\/p>\n

Don’t Feel Powerless<\/strong><\/p>\n

It is depressing to get a letter in the mail that says that due to no fault of your own, your rate is going up.\u00a0\u00a0 Just remember, your are the CEO of your personal finances.\u00a0\u00a0\u00a0 You can make decisions to maximize your income and minimize your expenditures.\u00a0\u00a0\u00a0 You have the power to fire your credit card company once you have paid off your balance.\u00a0\u00a0\u00a0\u00a0 In fact, when that day comes, you can even tell them that “you regret to inform them of your decision, but it is due to circumstances that are beyond their control…”<\/p>\n

\/\/www.askmrcreditcard.com\/news\/new-fees\/<\/div>\n","protected":false},"excerpt":{"rendered":"

Before, the passage of the Credit Card Bill of Rights, many people made all sorts of predictions, both reasoned and fanciful.\u00a0\u00a0\u00a0 Among the more reasoned predictions was that interest rates would go up, and that credit card fees would increase as well.\u00a0\u00a0 I have argued that credit card fees have not gone up, despite some […]<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[3],"tags":[],"yoast_head":"\nWhat You Can Do About Rising APRs?<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.askmrcreditcard.com\/news\/what-you-can-do-about-rising-aprs\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What You Can Do About Rising 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