Reasons for Change

• A credit card lender may decide to change the terms of your account for a number of reasons. Your credit score may have declined; the lender may have tightened its risk assessment criteria, revised its overall pricing strategy or determined that your account fails to produce sufficient profit. You may not be able to predict why or when your lender will seek to make changes; but the Credit Card Accountability, Responsibility and Disclosure Act provides you with certain rights that may help to minimize the impact of those decisions.
  
  

Interest Aand Fees

• A lender must give you 45 days notice before increasing your APR or fees. Your lender must provide a reason for any rate increase and inform you of your right to close your account if you decide to opt out of the changes. If you choose to opt out, you can pay off your balance at the existing rate; but your lender may require increased payments to ensure that your balance is cleared within five years. The 45-day notice period does not apply to variable rate accounts tied to an index, if a promotional rate is expiring or if a hardship plan has ended. You cannot opt out of a rate increase imposed because your account is more than 60 days overdue, but your account must revert to the lower rate once you have made six payments on time.
  
  

Payments And Limits

• Your lender is not required to provide 45 days notice before reducing a credit limit or changing the way in which the minimum payment is calculated. You do not have the right to opt out of either of these changes, both of which can adversely impact your cash flow. A lender can charge an over limit fee if you exceed the new, reduced limit, so it pays to keep a close eye on all correspondence and study your statements as soon as they arrive.
  
  

Considerations

• If you opt out of changes and close your account, the amount of your available credit decreases; the same applies if your lender reduces your credit limit. A decrease in your credit lines, without a corresponding reduction in your balances, will have a negative impact on your credit score. Closing an account that you have held for a while may also adversely affect your score. You may preserve your score and obtain a reasonable interest rate by transferring balances to a new card, while leaving your existing account open. If you decide to do this, carefully review all available options, paying particular attention to balance transfer fees.