Rising credit card rates hurt many - WALB.com, Albany News, Weather, Sports

Rising credit card rates hurt many

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By Delivrine Registre - bio | email

ALBANY, GA (WALB) - Eartha Lockett is like a lot of South Georgians in this economy. She used to depend on her credit cards just to get by. "In between pay periods if I really needed something than I would use them to get it. But I used them for mostly gas."

Lockett was also one of about 10 million credit card holders whose interest rates went up in the past six months for no particular reason. "I had like a 7 percent rate and they wanted to go up to 18 to 19 percent," said Lockett.

"As you know the banks had to take a tremendous amount of money through the stimulus program in order to stay alive. So they are now trying to increase profits and try to decrease exposure based on defaults," said Senior Financial Consultant for The Phenoix Group, Lonnie Bowman.

Congress is now trying to pass a bill that would allow card holders who pay their bills on time for six months to have their lower rates back. "Congress is trying to reverse the rates much like they did with the mortgage crisis," said Bowman.

But Lockett isn't waiting for that bill to be signed into law. She just pulled out her scissors. "I cut up all of my cards. My balances were low. So when I got paid, I just paid them all off and told them to cancel my accounts."

And she is now living on a strict budget. "I pay all of my bills on the first of the month. And as we go through the month, I have money to the side to use pinch by pinch," said Lockett.

"It's very important to have a budget. It's like the fuel gauge. You know exactly where you are and how far you can go," said Lonnie. And with credit card rates continuing to rise, more Georgians my soon follow Lockett's lead.

The version of the bill being considered by the Senate would require lenders to give a 45-day notice before increasing rates and require them to mail bills 21 days before they are due among other things.

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