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Beware of Rising Credit Card Rates
by Kimberly Lankford

My rate just increased on my Visa card even though I've never been late on any payments. The issuer says it's because I missed a payment on another one of my credit cards. Can they do this?

Not only can they do this, but the practice is becoming much more common. These "universal default" rules are generally buried in your credit card agreement's fine print, specifying that your rate can rise if you miss a payment on any other debt.

"This is widespread," says Paul Richard of the Institute of Consumer Financial Education in San Diego. "Rates can go up as much as 25%."

The results are damaging, but it's easy to avoid this problem. Make sure that you pay your bills on time, which is especially important as your holiday charges come due over the next few weeks.

Instead of depending on the postal service, sign up for an online bill-paying service that can make your payments automatically each month or let you specify in advance which date to move the money from your account. See Pay Your Bills Online for more information about your options.

It's also a good idea to check your credit report regularly, so your rates don't end up rising because of a mistake. Take advantage of the new law that allows you to get your credit report for free each year.