Consumer Payment Card News

Universal Default

A new study has found that some credit card issuers will jack-up your interest rate to 30% or more if they become aware you have opened a new card account or applied for a car loan or mortgage. The “universal default” business practice, unique to the USA, can send just about any consumer to the penalty box for very insignificant reasons. The annual study by San Francisco-based Consumer Action found that a declining credit score is the most common reason a cardholder’s rate is sent to the stratosphere. Paying a mortgage, car loan or other credit obligations late came in second. About one-third of the issuers who have “universal default” policies said that getting a new credit card could be considered a “default.” CA also found that the average penalty rate this year is 24.23%, up from the 2004 average of 21.91%. For more information visit: “http://www.consumer-action.org”:http://www.consumer-action.org

TOP TEN REASONS WHY YOUR CREDIT CARD RATE WENT UP
1. Credit Score Declines
2. Paid Mortgage Late
3. Paid Car Loan Late
4. Exceeded Credit Limit
5. Bounced a Payment
6. Too Much Debt
7. Too Much Credit
8. Got a New Card
9. Applied for Car Loan
10.Applied for a Mortgage

Consumer Action, founded in 1971, is a non-profit education and advocacy organization based in San Francisco, CA, with offices in Washington, DC, and Los Angeles, CA.

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