Credit Cards are the Devil
How Your Credit Card Rate Can Go Through the Roof for No Apparent Reason: "Most consumers know that your credit score affects the credit card rates that you are eligible for. What you may not know is that if your credit score is lowered, then the interest rates on existing credit card debt could increase significantly. How? Universal Default.
It’s not a phrase that most are familiar with, and it’s certainly not one that’s used in day-to-day conversation. And although you may not even know what it means, it is very possible that you could learn about universal default any day now—the hard way.
Buried in the fine print of the credit card terms and agreements, a universal default clause generally states that if you default (are late paying your bills) to the credit card issuer or any other lender the interest rate on the credit card could be raised. Banks that utilize the universal default clause periodically check credit reports of their cardholders. If a credit score is lowered for any reason—late payments, high debts on loans, etc.—then the universal default can be activated. Yes, even if you have a perfect bill-paying record with the card issuer.
According to Linda Sherry of Consumer Action, more banks than ever use universal default policies to increase interest rates based on their customer’s credit performance with other creditors. “Banks seem to be saying that if there is even a shadow of a doubt that a cardholder might not pay, they are going to get a premium on their money while they still can.”
“We (Consumer Action) believe the real purpose of these policies is to maximize revenue at the expense of those who are least able to afford it.”"
It’s not a phrase that most are familiar with, and it’s certainly not one that’s used in day-to-day conversation. And although you may not even know what it means, it is very possible that you could learn about universal default any day now—the hard way.
Buried in the fine print of the credit card terms and agreements, a universal default clause generally states that if you default (are late paying your bills) to the credit card issuer or any other lender the interest rate on the credit card could be raised. Banks that utilize the universal default clause periodically check credit reports of their cardholders. If a credit score is lowered for any reason—late payments, high debts on loans, etc.—then the universal default can be activated. Yes, even if you have a perfect bill-paying record with the card issuer.
According to Linda Sherry of Consumer Action, more banks than ever use universal default policies to increase interest rates based on their customer’s credit performance with other creditors. “Banks seem to be saying that if there is even a shadow of a doubt that a cardholder might not pay, they are going to get a premium on their money while they still can.”
“We (Consumer Action) believe the real purpose of these policies is to maximize revenue at the expense of those who are least able to afford it.”"
1 Comments:
It's funny that people feel like victims here. It's really simple. Don't have credit cards. If you have them, pay them off and close them. Step 2: never get another one. Credit cards aren't a disease. You don't just catch one.
Post a Comment
Subscribe to Post Comments [Atom]
<< Home