here's a novel idea!!! how about using cash and keep the credit cards for emergency use only !! keep all of them open and ignore the APR. who cares what they charge if you don't use them ? if you do need them, use it and pay if off in full within the grace period.. that way you can enjoy a high FICO score for high credit available and most (less than 5% ) used. get smart ... beat them at their own game..

Wow - Aaron you must be a certified genius!!  Obviously if everyone could pay credit card bills in full every month there would not be a big demand for them.

Aaron and Jason should read more carefully.   "Paying on time" is distinct from "paying in full".  A borrower who makes at least the minimum payment by the due date has met his or her contractual obligation, and the bank should be obliged to honor the original terms of the loan so long as that remains true.   The purpose of contract is for both parties to be able to know their rights and obligations and rely on them.  It is antithetical to the very concept for a bank to arrogate to itself the right to change terms for *existing* balances so long as a borrower meets his or her obligations.

What many of you don't understand is that this is part of the entire process credit card companies use to lure you and keep you in long term debt. Having worked in this industry previously, these companies have all the right, and you as the consumer have none, ie: change the terms of the agreement at their option. I left this industry because my conscience would no longer allow me to be a part of this process. High interest rates, late fee, credit line fees, and any myriad of fees allows these companies to hold onto your money. Citi couldn't keep their word to congress, see what happens when you don't keep your word to a credit card collector.

Citi big wigs only care about their big paydays, if it means higher int. rates so be it. The best thing to do is stop doing any kind of business with citi, close bank accounts move to smaller local or regional banks and cut up your citi credit cards. They could save millions by just stop sending out their credit card applications, I must get 15 to 20 per month.

Ok, with Citi since 2003. Never paid late. 6.99% fixed rate. $8.73 balance. Paid it off this month. Got the letter. Changing my rate to 14.99% VARIABLE! WTF? I called them and negotiated to a 11.99% variable (a joke considering I was at the low fixed rate). The reason I didn't opt out because I was worried about what it would do to my fico score (705) and worried about what kind of credit card I would get if I applied in this market. *Flipping a bird at Citi*

Now how else is Citi and Amex going to pay their execs their huge salaries? They can't use the bailout money for the salaries, so they'll just raise rates to cover the bonus'.

There is something everyone out there can do though. Get rid of your cards. If you owe money, pay it off immediately then cancel your cards. All this talk about getting better deals out there. Are you people nuts?! Get rid of the cards, period! When the card companies no longer have an income, they will drop rates and offer tons of incentives to try to get you back. If we as consumers put enough pressure on them, you may actually see cards with fixed rates with contractual stipulations that they can not raise rates, kinda like a bank loan.

As long as consumers keep buying, they will keep selling and getting away with every dirty trick in the book to take your hard earned money. Yeah, it may be convenient to have a card, but at what cost?

A business pays a fee everytiime someone uses the card. Do you really think the store pays that fee? Heck no, they just bump up the price of merchandise, adding their own percentage of the fee cost, to cover these costs. Basically, the business charges a fee on the fee. So if the card company charges a 3% fee to the store, the store will then apply their margin to the fee, say 5%. This equates to around 3.15% when you add it up. The store then marks up the prices by 3.15% so that the consumer pays the fee and profit. So now everyone pays for the use of credit cards. Then the consumer that uses the card pays interest on their balance. (the overwhelming majority of people do not pay off their cards every month).

So in the end, you paid a 3.15% markup on your groceries for using the card, then you pay another 9.9 to 29.9% on the balance (don't forget, you have a 3.15% higher balance in your account than you probably should). So you tell me where the convenience is when that gallon of milk ends up costing you $5 - $6?!

does nt your credit score go down when you cancell a credit card?

What if the mortgage companies was allowed to what the credit card industries are doing right now? Take your "Fixed Rate Mortgage", You were late! We have the right too now charge you at 29% interest on your $ 200,000  loan now! What would my payments be? People were complaining of ARM'S?   7% upto 9% Then to 12%

In my opinion, The real estate bubble will be small in comparision to a  "Credit Card Bubble"

Who  "Needs' A Bailout Now?"

     ME! I DO! ME! ME! ME!

Michael,

If you pay off your debt, you can close your cards without incurring a major hit to credit score. No debt means you won't increase your debt ratio. You may actually see an increase in your score because your debt ratio would become 0.

I do however encourage everyone to keep at least one card open, FOR EMERGENCY ONLY! And when you do use it, pay it off immediately. In my opinion, keep a lower interest rate card with a very manageable credit limit, say 2500 - 5000. But it will really depend on your ability to pay it off in 1 - 3 months.