When Credit Cards Change
With all of the junk mail that you receive, it’s easy to overlook something sent to you that just might be important. Credit card issuers are constantly mailing out new or pre-approved offers, so it’s easy to just toss everything from a credit card company that isn’t your monthly statement. It may be the easy thing to do, but it could cause you to accidentally overlook some important information.
The bank that issues your credit card will generally mail out an updated privacy policy when you open a new account, on a yearly basis, or any time that the privacy policy is changed. The privacy policy from the credit card issuer is a detailed overview of how the bank collects and uses your personal information. This personal information includes details about your income, account balance, and credit history. The privacy policy should explain the way that your personal information is used and shared both within the bank and externally, with financial or non-financial companies. It should also explain when and under what circumstances your information is shared. These circumstances may include protecting against fraud, reporting to a credit bureau, and with your written consent.
You are usually given the option to request that certain personal information is not shared under certain circumstances. For example, if you don’t want non-financial companies to get a look at your data or maybe you’d prefer that certain branches of your bank didn’t have access to personal information about you. Keep in mind that your request may be overridden by the law under some circumstances, and certain information may be excluded from your request for protection. If you do want to have some control over how the bank or credit card issuer handles personal information about you, you will have to contact them directly. There is usually a contact address for the bank included with the privacy policy so that you are able to tell them of your privacy policy preferences. This privacy policy information is actually very important for you as the cardholder to know about.
Even more importantly, credit card providers often send out notification of changes to the credit card’s actual terms along with the bank’s privacy policy in the mail. Consumers who don’t check the contents of their mail carefully may not realize that the notice of a change in their credit card’s terms is there or may dismiss it as more junk mail. This can end up causing you some serious concerns.
Changes to your credit card terms may be minor wording changes that have no actual effect on your or your use of the credit card. However, some of these changes may have a much greater impact on you and your finances than you realize. A credit card issuer may notify you by mail of changes to a credit card’s terms that involve the interest rate, the circumstances that might trigger the credit card’s default APR, and various changes or additions to fees. There may even be changes affecting such elements of your credit card agreement as the grace period or the rewards program that you have enrolled in. The changes to the credit card terms could be major enough that they are no longer even similar to the card that you originally signed up for.
There is an option if you find that the changes to your credit card are sever enough that the card is no longer as attractive as it once was. You have the ability to decide that you don’t want to continue using that credit card when the new terms go into effect. You can opt out by simply notifying the credit card issuer that you do not accept the changes. You will need to read the opt out information included in the mailing in order to find out the correct way to opt out, or you can simply call the credit card company directl to find out how to do this.
Opting out of new credit card terms can be the best decision if you applied for a low interest credit card, but the new terms either raise the interest rate outright or put you in danger of defaulting to a higher APR. You are under no obligation to simply accept the changes to your credit card. Be careful, however, if you are currently carrying a balance. You don’t want to simply cancel your card, as this may trigger an interest rate hike on the remaining balance. Be sure to communicate that you are exercising your opt out option instead of simply canceling the account.
Keep in mind that any time you receive a letter from a credit card company or bank with whom you already do business, you need to check carefully to find out if there is any important information included.