“Rate hike to pinch credit card holders”
The Associated Press, MSNBC
June 30, 2004

If you’ve been lulled into carrying large balances on your low-interest credit cards, prepare your wallet for a rude awakening. The cost of carrying credit-card debt will get more expensive as rates rise.

In a rising rate environment, experts say it’s likely that more issuers will move to variable rates, since that structure is not only more profitable, but it also gives them the flexibility to protect their margins as their cost of funds increase.

Some companies, like Discover Financial, are changing their customer’s annual percentage rates from fixed to variable. So, just because you’ve got a fixed-rate card doesn’t mean you’re safe. Issuers can change or adjust rates with as little as 15 days notice.

This is only a summarization. You can read the entire article on MSNBC’s website at http://www.msnbc.msn.com/id/5325438/

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