American Express is said to be raising interest rates to make its stockholders happy and raise revenues. This will also put it in line with other banks high interest cards. If you have a low interest rate now you may soon receive a letter telling you of your higher rate. This increase could effect more than 1 million customers with the average interest rate increase of 2.5%, and the minimum interest rate charged of 12.99%.
How long you have been with AMEX nor your credit responsibility will not help determine the increase. With the average American household having $10,000 of debt the 2.5% could cost more than $2,000 of additional interest annually. American Express is doing this to increase its earnings when it has recently lost huge partnerships with Costco and JetBlue. They currently charge merchants a higher interchange fee than Visa or MasterCard and justify this because their customers are supposedly more affluent and spend more in the stores. This may attribute to higher rewards through the Membership Rewards program, OPEN, and high grocery store cash back with the Blue Cards.
If you currently have credit card debt with low interest on AMEX cards and a good credit scores (above 700), you can consider a balance transfer. You can move the debt from a high rate credit card company to a lower promotional rate. Some of the best offers are from credit unions, that are offering promotional rates as low as 0% for 12 months or 2.99% for 24 months. Once you do a balance transfer remember not to do any spending on the new credit card and to pay your bill on time and in full every month.
If your credit score is below 700, you may want to consider a personal loan. Have the Personal Loan bank do a soft pull where it does not hurt your credit score and then compare the APR to that on your American Express. Don’t close your credit card with AMEX because you want to keep that open line of credit which helps your score down the road.