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Part 2 of KSL's exclusive five-part series "Watching Utah's Money" Save more and spend less with Clark Howard.SALT LAKE CITY -- Clark says, "The No. 1 call I get from people is people who have received notice from their credit card company that rates are going up, up, up." Clark takes a closer look at those dreaded charge cards, keeping your rates low, and making sure you keep credit lines open right now while the economy is uncertain.
First, what to do if your credit card company tries to raise your rates? Clark says there's a little-known secret about interest rate notices.
Clark said, "In most of the letters that people are getting, or the notices that are coming in statements, you are given the right to close off your credit line and pay off your balance under your existing interest rate instead of the new one.
"And even though it will pinch your credit score, you should take advantage of that if you're running a meaningful balance on your credit card, so that you're able to pay off at the old rate instead of the new one."
Clark is a big fan of charge accounts at credit unions. The offers aren't as sexy, but a lot more stable. He said, "Credit Unions never have marketed their Visa's and MasterCard's, but you should go to your credit union.
"If you're not a credit union member yet, join one and get your Visa or MasterCard from them because even though they're not going to offer you all the fancy gimmicks of 0.9 percent for 11 days or whatever, they're going to offer you a straight up legitimate deal, and they're not going to boomerang you from 9.9 percent to 29.9 percent all in a month."
Finally, how to make sure your cards don't get canceled when they get paid down. Clark said it's as easy as remembering two holidays a year.
He explained, "If you don't use them, usually for 18 months to 24 months, they're going to close them up on you, and that will hurt you on your credit scores two different ways: If you will on your birthday and then at Christmas time use the back of the wallet cards once each, each time and just pay in full when it comes, you're going to preserve that in your credit mix and you're not going to go to go into inactive status on that card."
Tune in to Clark Howard's special reports "Watching Utah's Money" all this week at 5:40 a.m. and 7:40 a.m. on KSL Newsradio 102.7FM/1160AM.
