Help Me Howard: Credit Rates

WSVN -- Raymond Purcell is like most people. He is working, but the money is not piling up.

Raymond Purcell: "I'm getting by. That's just about it. There's nothing for emergencies or very little, but it is getting by."

Getting by, hoping things will get better. Instead, it suddenly got worse for Raymond.

Raymond Purcell: "I received a letter this past week stating that my interest was going to go up to almost 30 percent, which right now it's 13.9 percent."

The interest on his credit card is going from 13 percent to 30 percent. More than doubling.

Raymond Purcell: "It's disgusting. I'm kind of on a fixed income right now."

And Raymond has had this credit card for 30 years and never missed a payment, never been late and never been treated like this.

Raymond Purcell: "It's just crazy and for no reason."

Today Raymond owes about $6,000 on his card, but with the interest rate doubling it means his monthly payment will be doubling, dumping him into a financial hole.

Raymond Purcell: "And you take 30 percent interest, where am I supposed to pay for my gas or my car insurance or my electric bill? That money is allocated for that bill."

And like dominoes falling, Raymond worries credit card troubles could affect his nearly perfect credit score, which he has spent his adult life developing.

Raymond Purcell: "No matter what I do it's going to affect my credit score, which is going to affect everything that I'm trying to keep straight."

Well, Howard, the old line "kicking someone while they are down" comes to my mind. When it comes to legal options, what comes to mind for you?

Howard Finkelstein: "The federal government has passed new rules that block credit card companies from jacking up their rates, but it doesn't go into effect till next year. This is an attempt by the credit card companies to lock people into higher rates before the law takes effect. So, legally, right now, they can jack up your rates."

The banks say rate increases are necessary because of credit card customers not making their monthly payments. Consumer experts says if you are socked with a soaring rate, shop around and look for a company with a lower rate. Check with your credit union. They traditionally have low rates, and if you can't afford to pay off your credit card, don't forget, you can do what's called opting out.

Howard Finkelstein: "If you notify your credit card company in writing that you are opting out, it freezes you at the current lower interest rate. The bad news is you cannot use that card anymore, but you can always shop for another credit card company."

Raymond is getting through the tough times and will get through this, and he has to remind himself to not let a soaring interest rate bring him down.

Raymond Purcell: "I can see where people get depressed. I've always been an outgoing person, and I find myself staying home more, worrying about bills."

Patrick Fraser: "What is the highest interest rate a company can charge you on a credit card? Well, Florida caps it at 18 percent, but there is a loophole. If it's a national card or issued by a federal bank, there is almost no limit on the interest rate. The best thing you can do: opt out, slowly pay off that card and don't use it anymore.

Got your frustrations rated at an all-time high? Ready to opt out? Put us in charge. We don't want credit. We only care about your interest.

CONTACT HELP ME HOWARD
EMAIL: helpmehoward@wsvn.com (Please include your contact phone number when emailing)
REPORTER: Patrick Fraser at pfraser@wsvn.com
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