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Have you gotten a notice telling you that your credit card company will be raising your interest rate? 

There is something that you can do about it. 

Why are these rates going up all of a sudden?

It may be due to rising costs, especially related to defaults on loans during a troubled economy. 

However, some experts say that it is due to a new credit card accountability, responsibility, and disclosure act that is being phased in over the next year. 

This act was put into place to try to get consumers to use credit more responsibly and to restrict  how and when banks can increase rates and charge fees. 

However, even though some of these restrictions are not yet in effect, many banks are taking some fairly drastic measures now to increase rates. 

Does this mean that if you have a balance on your card right now, that your bank will be able to charge a higher rate on that balance?

Not necessarily. 

If you took advantage of a special offer such as 0 percent interest for 12 months, and you are meeting all of the terms and conditions, your credit card company will have to honor this offer until it has expired. 

However, if you make a purchase or do a balance transfer and do not pay within the grace period, this new balance could be subject to the new higher interest charges, which could be as high as 30 percent.

If you are not happy with this new interest rate, what can you do?

You have several options:
• You can accept the new rate and avoid the increase by paying your balance in full in each month.
• You can  opt out.  But if you do, the card issuer will likely close your account when your card expires, which, unfortunately, could lower your credit score and limit your access to credit.
• Consider paying  the balance in full right away or transfer it  to another card that has a lower, fixed rate.  Although most cards will only offer a variable rate  you may be able to find a low interest, fixed rate with a credit union.