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How Your Credit Card Terms Could Change

You could face higher interest rates and fewer credit card rewards.We saw what happened on the stock market after Standard and Poor’s knocked the United States’ debt rating down a notch, but what does the move mean for credit cards?

The quick answer is the downgrade means very little, at least in the short term. However, there are three indirect changes that could occur in the long-term based, in part, on the country’s economy:

Interest rates could rise. The Credit Card Act of 2009 prevents issuers from hiking interest rates on debt you already have; it also regulates the interest rate that a card issuer can charge.

This means that no matter your current interest rate, the issuer cannot change it without advance written notice, giving you time to keep or cancel your credit card.

If the economy remains flat, banks will slowly raise interest rates on credit cards to secure more revenue.

A fast recovery will likely prevent interest rates on cards from rising.

Credit card rewards could disappear. If the economy does not rebound in the next few years, credit card issuers will be less likely to give out rewards for using plastic.

Right now, banks like Chase, Citi, American Express and Capital One are fighting each other for your business.

In the future, your business might be of little to no value to these banks, especially if some of them aren’t around. The better off banks are, the better of your credit card rewards are.

Annual fees might increase. Most credit cards today charge no annual fee. Even the cards that offer a great rewards program, like the Chase Freedom and Discover More do not charge their holders an annual fee.

However, similarly to what you see with savings and checking accounts, issuers may begin to charge fees on all credit cards.

If you’re looking for a new card, compare the top credit card offers in our extensive database.

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