I have been on a course of reducing debt over the last few years. More purchases using cash, paying most bills as quick as possible. But like most Canadians (Americans as well) I carry some credit card debt. My interest rate for my cards was quite reasonable so I had gotten somewhat use to using them to make mostly online purchases. Over the last little while my rate had jumped several percentage points. I was upset, however I decided that I could live with an increase for now. However today on my latest credit card statement the rate was bound to jump another 2%. I can absolutely understand when the cost of debt is high or that the account is in poor standing that interest rates would reflect those realities, however neither is the case here since the current overnight lending rate in Canada is 1/4 percent and my credit card account is always been in good standing. I am not going to speculate on why this is happening, when I spoke to the representative on the phone I was told that lots of accounts were going up and that the actual base rate was almost 20%. I have decided out of principal that I can no longer deal with the vendor and be cancelling my credit card (paying off the remaining balance). After this we will be down to one household card, just enough for those emergency requirements/needs. I suspect I am one of the fortunate ones that can afford to pay off and close out an account but I wonder how many others will do the same when faced with this reality.

Leave a Reply