Credit Card Hell, Vol. XXVII

by Alex Stenback on May 12, 2005

Credit_cardsIt happens to everyone once in a while – miss a payment on a credit card and your rate gets bumped up.  If it’s 30 days late, it may even nick your credit score for a short time. Then you catch-up, move on, and all is right in credit land. Right?  Maybe not.

According to a recent article, a growing number of creditors are now adding a knife-twisting bit of fine-print to their contracts, and it can cost you dearly.  It’s called the ‘Universal Default Clause,’ and it allows one creditor to penalize you for late payments made to other, unrelated creditors. 

"More than 30 percent of major card issuers will raise your rate because of actions on other credit accounts — even if the credit card account getting the higher rate has a perfect payment history…"

Now, we’re all for paying bills on time, a loan is a loan, after all. But this practice seems more than a little underhanded and usurious.  One more reason to actually READ the fine print on credit applications. 
· Financial Disaster Lurks in Fine Print [news-press.com]

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