Friday, June 2, 2023

Fighting an Increasing Rate

by Scott Bilker
Scott Bilker Scott Bilker is the founder of and author of the best-selling books, Talk Your Way Out of Credit Card DebtCredit Card and Debt Management, and How to be more Credit Card and Debt Smart. Receive the 5-Year Loan Spreadsheet when you subscribe to his email newsletter.


I had a card that had a fixed rate of 5% on my balance. I closed the account years ago when I started taking control of my debt. Since this was the lowest rate of the cards I had, I was only paying the minimum and concentrating instead on paying off other high interest credit. I received a notice with one of my invoices that they would be increasing the rate to 20% and that I basically didn’t have a choice in the matter (fine print). I transferred the balance over to other cards that would have a lower APR than the 20% they would be imposing; however, this severely limited my available credit for emergency purposes.

Just wanted to know if it is legal for them to increase the rate on a closed account and if there was any other option for me to consider. Obviously, this would be information for any future similar situations. Thanks!





Do you have the original paperwork that gave you the fixed rate of 5%? I truly hope so because it’s that documentation that could ultimately help you keep that rate. The only problem is that you did transfer the balance. But you did so because you thought they wouldn’t keep the rate at what they promised.

I see this happen frequently. That’s why I ALWAYS keep copies of the letter, terms, conditions, etc. in my files for just such a situation. I even photocopy applications!

If this happened to me, and I found evidence that they couldn’t raise the rate, then I might even contact a lawyer and see what could be done. I would also contact the Federal Trade Commission and other consumer groups to see if they could help me make the bank honor their agreement.

For the future…get everything in writing and keep it in a file!

Good luck and please let me know what happens.