With the credit meltdown of last fall and all the fallout in the business since then, it was only a matter of time before you’d get a letter from your credit card issuer phrased something like this.
“We’re notifying you that the terms of your account are changing.”
The Hodges house got one of these from Capital One this past week. It’s a Visa with no balance, and we don’t use it any more (part of the credit card purge we and many others have done). The old annual percentage rate (APR) was 12.65 percent for purchases and a 19.74 percent rate for cash advances.
The letter advised us of a new rate at 17.9 percent for purchases and balance transfers. As with many deals, it’s adjustable and is essentially 14.65 percent added to the prime rate. The default rate, which is triggered when your payment is late twice in any 12 billing periods, will be 29.4 percent.
It was the rationale that got my attention.
“Due to extraordinary changes in the econ…