November 24, 2009

Consumers should shop around if credit card rates increase

by Cara Restelli, KY3 News

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Story Published: Nov 3, 2009 at 6:23 PM CST

Story Updated: Nov 3, 2009 at 11:35 PM CST

SPRINGFIELD -- A new credit card reform law goes into effect on Jan. 1. Before it does, some credit card companies are trying to squeeze in some last-minute changes to squeeze more money out of its customers.

“For people paying their balances in full every month, there are a couple of credit cards that are experimenting with charging an annual fee,” said Tonya Collister of Consumer Credit Counseling Service of Springfield.

People who pay off their balance each month, don't use their cards regularly, or don't carry a large enough balance could see an annual fee of $29 to $99. The companies blame it on growing delinquency rates.

“The people who are responsible for their credit are having to pick up the tab for people who are not responsible with their credit,” said Collister.

There is another option. Credit unions offer credit cards with low interest rates and no annual fees. That policty doesn't seem to be changing anytime soon.

“I don't see that changing. The motto for credit unions is ‘people helping people,’ so that's what we stand for,” said Suie Kasterke of CU Community Credit Union.

The CU Community Credit Union offers a card with an introductory rate of 6.9 percent and a permanent rate of 9.9 percent, well below the industry average.

“We're not trying to make big profit for stockholders. We're here for members,” said Kasterke.

That could make some card holders think twice abut what's currently in their wallet. You do have to be a member of a credit union to qualify for the credit card. That usually entails opening a bank account.

Another idea is to shop around at local banks. They also often offer credit cards at more competitive rates.

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