It is now common practice for credit card companies to raise interest rates at the first sign of trouble. They were eager to increase your limit when times were good, but during a recession, even with low market interest rates, they do not hesitate to raise your interest rate if they sense that you may have difficulty in making your payments in the future?
Does this mean that credit card companies are evil? Do they take advantage of people in a tough situation? Perhaps, but that’s not the point. The point is that they do have the power to increase your interest rate whenever they want. That’s the truth about credit card costs.
You have the power to use or not use your credit card. You have the power to pay your balance in full each month so that you don’t incur any interest charges. And that’s today’s tip: do not carry a balance on your credit card.
If you do have a balance owing on your credit card, make a budget to find ways to save money so you can pay it off yourself, or consider other options like a consumer proposal or personal bankruptcy. Ultimately whether or not you pay a very high rate of interest on your credit cards is up to you.
