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Yorba Linda Debt Settlement Lawyers on Fighting Arbitrary Changes to Credit Card Accounts

April 2, 2009

As Southern California debt settlement and bankruptcy attorneys, we know how important changes in credit cards' balances, interest rates and limits can be for clients' efforts to get out of debt and build a strong credit rating. That's why we are disappointed by a recent series of "clampdowns" by credit card companies that raised interest rates and monthly payments or lowered customers' credit limits. In many cases, these changes are applied to customers who don't have any payment problems. According to the San Jose Mercury-News, the changes are being applied to everyone because credit card companies are feeling the effects of the bad economy and trying to cut their losses.

Many consumers are upset about this, and not just because they can buy less with their credit cards. Because a consumer's credit score is tied to how much credit he or she has available, changes to credit limits and interest rates can have an immediate negative effect on credit scores. This effectively penalizes cardholders with good payment records for others' irresponsibility. And while a new Federal Reserve rule will make it illegal for credit card companies to change card terms arbitrarily, it won't take effect until July of next year, meaning that current changes are perfectly legal.

Experts interviewed by the Mercury-News pointed out things that cardholders can do to fight the changes, including transferring the balance to a card with better terms or politely negotiating for a return to the old terms. Credit card companies don't have to reverse their changes, but many will if you have a good argument. And American Express cardholders can get paid to close their accounts right now, although closing an account may also harm your credit. However, our Placentia debt settlement attorneys know that not every consumer feels comfortable negotiating directly with their cards, especially if they feel overwhelmed and stressed by the amount of debt they have.

Our debt settlement practice at Howard Law LLP helps consumers in just this situation. Our Orange debt settlement lawyers negotiate with credit card companies, debt collectors and other creditors to correct unfair or unauthorized charges and settle debts for a fair and realistic amount. We also protect clients from unfair debt collection practices and predatory lending. If you're in any of these situations and you know you need help from an experienced negotiator, our firm offers free, confidential consultations. To set one up, please contact us online as soon as possible or call us toll-free at 1-800-872-5925.