It's Your Money: The credit crunch - WKOW 27: Madison, WI Breaking News, Weather and Sports

It's Your Money: The credit crunch

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Thanks to the credit crunch and a growing number of defaults, credit card companies are coming down hard on borrowers - even those with excellent credit histories.

In tonight's it's your money report, how card companies are taking the hard times out on their customers, and what you can do about it.

If you have a credit card, chances are the company that issued it has changed the terms of your agreement, and you don't even know it.

"about 77% of the credit card companies that answered our survey said, yes, they will change the terms and conditions at any time and for any reason," sol carbonell of consumer action says.

Carbonell is referring to a survey of credit card companies they did earlier this year.    The changes can include interest rates, and can happen even if you've never been late on a payment or gone over your credit limit.

"Your credit card holder agreement says that they can change it for any time and for any reason," he says. "They do have to provide with an explanation.   As a consumer you have the right to request the explanation of why the changes are taking place.   However, it could be any reason.   So, it could be the economy, it could be your credit score, it could be how well you're behaving with other creditors."

That's right, the economic pain felt by credit card companies is a reason they're raising rates and changing terms.   Now, the companies are required to give you 15-days written notice of any changes, but many of us miss the warning because we mistake it for junk mail.    But if you do catch it before it happens, you can call the company and ask them to keep your rate and terms the way they are.    They may agree, but be ready if they don't.

"In that case, you can transfer your balance to another company.   But what you have to make sure is that, on your credit report, it says 'closed at consumer's request'.   That's essential, that's crucial," Carbonell says.

Bottomline: You need to be an active manager of your credit accounts. 

That means read your monthly statements thoroughly and read anything else that comes in the mail from your credit card company... That's how you'll find notices of change. 

And experts say one of the best ways to protect yourself is to pay your bills on time and keep your credit card balances below 30% of your limit. 

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