How are credit card companies treating you? - Economic Crisis

I got a call from Kate Rutherford from CBC radio in Sudbury Ontario.

Kate was inquiring about how the credit card companies were dealing with the economic crisis situation. She was concerned about credit card companies increasing interest rates, service charges and even decreasing people's lines of credit.

Credit card companies make their money from interest and service charges. They base their interest rates and service charges on the level of risk that the individual is at.

This means that if your credit score all of a sudden decreases for any reason, they may charge you a higher interest rate.

American Express is charging me higher interest rates, even though I've got excellent credit
As a result of Kate's call, I contacted American Express. I have a Business Gold card with them.. The customer service rep indicated that my interest rate had increased from 14.99 % to 16.99 % even though my credit score hadn't declined. She indicated that this was because of the economy and the write offs that they're incurring.

Check your credit score with Equifax and Transunion.
If you want to understand why you've received a interest rate hike, or why you may receive one in the future..it's best to in vest $20-$30 to purchase your credit reports. This will tell you exactly where you stand with the credit bureaus. And you'll know what the credit bureaus are reporting to your credit card companies (and other lenders)

This is especially the case for workers who have been laid off in this economic down turn.. If you've used up your cash reserves, and are now using credit cards as income, this could adversely affect your credit score, thus driving up your interest rates.

I always tell people... if you're in doubt as to where you stand with the credit card company...it's worth it to take 15 minutes and call them up. After all , they are suppliers of credit, and should be there to give you the service you need.