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| Credit Card Myths |
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Here are some common misconceptions about credit cards.
Myth: "As long as I make my credit card payment, the interest rate won't change."
Reality: That's not necessarily so. More card issuers are adopting "universal default" clauses that let them boost rates even if you stay current on your payment. Falling credit scores, missed payments to other creditors, bounced checks and spending above the card's limit all are factors that can trigger higher rates. About 45 percent of banks have universal-default policies and the tally is rising, reports researcher Consumer Action.
Myth: "Card issuers need my consent to change key terms."
Reality: Card companies can make unilateral changes with 15 days' notice. Even finance companies offering supposedly fixed-rate cards can boost rates, impose new penalties and alter other terms.
Myth: "Interest rates on credit cards stay the same for people who pay their bills promptly."
Reality: Rates can and often do change on variable -- and fixed-rate cards. Both are driven by the prime rate, which has been rising for the past year.
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