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When You Can't Opt Out

Effective August 20th, the Credit Card Act requires credit issuers to provide 45-day advance notice of a change in interest rates. The idea is that consumers will now have a sufficient amount of time to review the changes, exercise their right to opt out of the new rates, and search for replacement credit cards.

However, it's important to remember there are certain circumstances in which you have no right to opt-out. Three of the most common are as follows:

  1. If you have a variable rate card, you're out of luck. This is exactly why many credit issuers are switching fixed rate cards to variable rate cards in light of the recent legislative changes.
  2. If your credit issuer raises the minimum payment requirement, you're stuck with it. This is not the same as an interest rate increase, even though you will need to pay more each month. Remember, raising your minimum payments isn't necessarily a bad thing, as it will help you reduce your debt faster while paying less in interest charges.
  3. You also lose the right to reject an interest rate increase if you're more than 60 days late on payments.
on Mon, 2009-08-31 17:00