Most recently someone I know received a notice from a
credit card bank with the above headline written in bold.
This person has excellent credit and always pays more than the
minimum balance. However, they do not use the card, so the
balance keeps going down.

The current interest rate on the card is 8.99, the credit
card company is giving my friend notice that they are raising
the rate to prime plus 13.99, which would make the new rate
about 17.99%.

Here is the kicker. The notice says, “Important,
Please know that you have options”. If you accept the new rate
there is no need to do anything. Isn’t that just nice of them.
On the other hand, “If you do not accept the APR changes”,
your card Will no longer be available for use”.
Also, you will lose any rewards points you have accumulated.

Now for the implied threat. “If we close your account
we will not be liable to you for any consequences resulting from
closing your account or suspending your credit privileges”.
They provide the disclaimer because they know that closing
the account will negatively impact your credit rating. This
is the equivalent of the loan shark telling you he’s raising
the “Vig” and if you do not pay, he cannot be responsible
for the outcome, you know, like broken legs, etc.

The reason stated for the change in terms, is that
the bank needs to maintain profitability, and your paying
more than you are asked each month, on time, is not allowing
them to rip you off, so they are trying another tactic.

Aren’t our lawmakers wonderful.They wrote a new law
making all this legal, called the “credit card reform act”.
It does not officially take effect until June, of 2010. So,
the banks are trying it out early. You know, like practicing.

Under the law when parties rewrite the terms of
an existing contract in this manner it is called “Novation”.
Their is a program called ” Court Mediation Services” which
utilizes this same legal concept, and has been doing so for
5 years, to turn the tables on your creditors and get you out
of debt. The program works, and you can learn more about it
by visiting: American Debt Enders.
Just click on the tab that says” Alternative Debt Relief”.

If you would also like information on debt settlement or
debt management, please feel free to browse our site as we also
offer these programs. The consultations are always free and
we are on a mission to help you attain debt freedom.

Also, please feel free to subscribe to our FREE
credit counseling newsletter, by clicking on the subscribe
now tab at our site.

It is time for you to take control and not allow
yourself to be victimized by these thieves.
We want to help. Always free consultations with no obligation.

Written By:
Steven Ciantro
Member National Association of Certified Credit Counselors
American Debt Enders
Help@americandebtenders.com
877-766-2465