The Credit Card Monsters, Are They Really?

I am sure many of you use credit cards in your personal and business life. They have been a necessary evil for many years now and have become a standard as a way of life. Well, that might change if you are one of the millions that are about to, or already have, received a happy gram from your credit card company that your rates have just been raised. Not just raised a little, but to an exorbitantly high level.

Chase, Citi and Bank of America are all jacking rates before new federal legislation hits in February of next year that will limit rate hikes and structure. Some good payers have seen rates balloon to 29% and are furious that their good records account for nothing to the lending institutions.

OK, here is the blunt business analysis. Banks are doing whatever they can to protect themselves, shore up their balance sheets and make extra cash. It does not sound so nefarious if you take an objective look at what they are attempting to do. Would you do the same thing in your business if you could and your existence depended on it? You probably would.

The real issue is how and when they chose to do it. It is pretty darn clear they are doing this at a time where people need credit the most and they are going to catch grief from everyone that has been affected by the rate hikes. So don't get caught with your proverbial pants down; be prepared and read every notice that comes from you credit card company and don't be afraid to call and complain. It may not do any good, but the public pressure could be the catalyst to make them change their tactics.

The economic climate has changed dramatically so we all need to stop dwelling on the past and get on with the way things actually are. Will the old days of free flowing credit be back? Probably not in the same fashion that the were before. It is imperative that business owners and consumers get on board with the new reality and start making decisions within the new framework.

Check out http://www.nydailynews.com/money/2009/03/16/2009-03-16_credit_card_hike_fright_banks_raising_ra.html