(John from South Carolina) My interest rate just went up on my credit card even though I keep making the minimum payment. I heard that rates were going up, but mine went from 14% to 25%. Why did this happen?
John, your situation involves more than just regular interest rate increases. Your creditor likely labeled you as a slow paying card holder. Some creditors would penalize you for failing to send in an amount above the minimum payment at least once per 6 month period. Credit card companies are now prohibited from doing so because of a recent law.
The best bet to lower your interest rate is to send an extra amount for the next three months. This extra amount should be at least $50 to $100 depending on the size of the minimum payment. Once you have overpaid for consecutive months, call and demand a lower interest rate.
