BACK

The Credit Guy

You can’t opt out of credit card teaser rates

Summary

Promotional (teaser) APRs are temporary and that was disclosed when you got the credit card, so you can’t keep a 0 percent rate forever and opt out of the higher, permanent rate.

The content on this page is accurate as of the posting date; however, some of our partner offers may have expired. Please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

Dear Credit Guy,
I have a promotional rate of 0 percent that will expire on Jan. 1, 2010. The rate that I agreed to when I first got the credit card will be 11.24 percent after the promotional rate is up. So, my question to you is, can I opt out with my promotional rate before Jan. 1, 2010, which is 0 percent, or do I have to accept the 11.24 percent that I originally agreed to when my promotional rate is up? — Bernita

Dear Bernita,
Unfortunately, the answer to your question is, no, you cannot opt out of the 11.24 percent interest rate. The promotional rate is just that, a promotional rate with an end date. You agreed to the terms of 0 percent interest until the end of the year, and then a rate of 11.24 percent after that. The regular interest rate of 11.24 is not a term for which you may opt out. It is part of your original agreement with the card issuer.

I can understand why you might think otherwise. The Credit Card Accountability Responsibility and Disclosure Act of 2009 is taking effect in phases; the first big batch of reforms that took effect in August 2009 gave consumers the right to opt out of many rate increases. But that doesn’t apply to the end of promotional, or “teaser,” rates.

But if you happen to receive one, you could transfer the balance from your current card to another promotional rate card. Two things I’d like you to keep in mind should you decide to do this. One, you will be adding additional credit, which you will have access to with the new card. Access to too much credit may make a potential lender nervous if you are planning to borrow money for a car or home any time soon. You might consider closing the old account after the transfer is complete to avoid this issue. Two, I would only make this move if you would be able to pay off your balance within the promotional rate period.

I don’t blame you for wanting to hold on to that 0 percent interest rate. You may not, however, have to settle for the 11.24 percent rate if you have good credit. Do some research on [%Link?type=cardcategory&id=83&text=”low interest credit cards”%]. Be sure you understand all the terms before making the change and watch out for high balance transfer fees. You could, of course, pay off the balance before Jan. 1, 2010, and then the increase in interest rate would be a moot point.

You don’t say so, but if the reason you were hoping to opt out is because you would have trouble making payments at the 11.24 percent rate, then I recommend you contact a qualified nonprofit credit counseling agency and get some assistance. You can find a trusted agency at from the Association of Independent Consumer Credit Counseling Agencies or the National Foundation for Credit Counseling. Your certified counselor will thoroughly review your finances and make recommendations. If you qualify and were interested in a debt management plan, you would most likely be able to pay down the balance at a lower interest rate. However, the account would be closed and you would not be able to use it for purchases.

Take care of your credit!

See related:Consumers gain right to opt out of many credit card rate increases, Guide to the Credit CARD Act of 2009

 

 

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

What’s up next?

In The Credit Guy

Tough choice: credit card debt vs. down payment on a car loan

Yes, you can raise your credit score by paying down card debt, but you don’t want to get upside down on a car loan in the meantime.

See more stories
Credit Card Rate Report Updated: September 16th, 2020
Business
13.91%
Airline
15.48%
Cash Back
15.94%
Reward
15.78%
Student
16.12%

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.