Universal Default & Your Credit Card

One great feature for the credit card companies is Universal Default. The same feature is completely and totally terrible for the customer. I can't say this with enough negative adjectives.

What is Universal Default? A sterile definition is we (credit card company) look at your general credit profile to determine the current rate for you our customer. Can you define general credit profile?

Certainly

When a credit card has Universal Default as a feature it means we (credit card company) look to see how you have been paying your bills to other companies. If they determine you have not been paying some other bills on time they reserve the right to increase your rate to the default rate.

What this actually means is if you are late on say your Visa with ABC Credit Card, but never late
on your MasterCard XYZ Credit Card, the XYZ can increase your rate to the default rate. It does not matter that you were on time with XYZ. Being late on one bill means you have been late on ALL YOUR BILLS!!!

This doesn't seem right or fair does it? Well, at one point a couple years ago nearly 60% of all credit cards had this feature. Presently some have ended Universal Default. However, you should call your credit card company to see if any credit cards you have still have this feature.

I am willing to bet there is still a good percentage still has this feature. Make sure you review any credit card applications for Universal Default. Regardless of rate you should avoid any card with Universal Default since you never know if you'll miss a payment or two and risk having your rate increased on a card you never were late.

Remember debt knowledge will increase your debt strength.

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