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Scott, I had a card that had a fixed rate of 5% on my
balance. I closed the account years ago when I started taking
control of my debt. Since this was the lowest rate of the cards I
had, I was only paying the minimum and concentrating instead on
paying off other high interest credit. I received a notice with one
of my invoices that they would be increasing the rate to 20% and
that I basically didn't have a choice in the matter (fine print). I
transferred the balance over to other cards that would have a lower
APR than the 20% they would be imposing; however, this severely
limited my available credit for emergency purposes.
Just wanted to know if it is legal for them to increase the rate on
a closed account and if there was any other option for me to
consider. Obviously, this would be information for any future similar
situations. Thanks! Mike
 Mike, Do you have the original paperwork that gave you the
fixed rate of 5%? I truly hope so because it's that documentation
that could ultimately help you keep that rate. The only problem is
that you did transfer the balance. But you did so because you thought
they wouldn't keep the rate at what they promised.
I see this happen frequently. That's why I ALWAYS keep copies of the
letter, terms, conditions, etc. in my files for just such a
situation. I even photocopy applications!
If this happened to me, and I found evidence that they couldn't
raise the rate, then I might even contact a lawyer and see what
could be done. I would also contact the Federal Trade Commission and
other consumer groups to see if they could help me make the bank
honor their agreement.
For the future...get everything in writing and keep it in a file!
Good luck and please let me know what happens.
Scott
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