Citigroup Inc. and American Express are two of the largest credit-card issuers who recently announced they will hit millions of consumers with interest rate hikes just before the start of the holiday season. A two to three percentage point increase seems to be the target, but the severity of the rate hikes will likely fluctuate depending upon whether you carry a monthly balance. So, if you carry a balance and receive notice from your credit issuer regarding an interest rate hike on that balance, it's important to know you actually have the right to "opt-out".
By opting-out, you agree to pay off your balance at the current rate, and it may also mean you will no longer make new purchases on the credit card. But this isn't always the case. For example, Citigroup's opt-out terms often allow consumers to make new purchases at the lower rate until the card's expiration date. Either way, you should receive detailed information on your options and exactly how to opt-out with any notice of a rate increase. Be sure to read the "opt-out" terms and conditions carefully, and then make an educated decision that best aligns with your personal financial situation. If given an option to call or send a letter to confirm your decision to opt-out, sending a certified letter for record-keeping purposes is always the best route to take.
