Remember the phrase Universal Default. Over a third of all credit card companies have built it into their credit card agreements, and it's the next thing we all have to watch out for.
What is it? In a nutshell, universal default means that a creditor can penalize you and raise your interest rate if you're late on your payments to a different creditor.
That's right, if you are late on your payments to anyone, your credit card interest rate will skyrocket and your credit score will be further damaged. Sound evil? It is.
What to do? Read the fine print closely, and stay far away from any creditor who includes a universal default clause in their agreement. And pay all of your bills on time--it's more important now than ever.
Here's a link to a Bankrate.com story about universal default. It contains a pretty good overview of the problem, and you'll notice that our friend Paul Richard is quoted in the story. As usual, he's right at the forefront of the emerging issue.
(And universal default is definitely emerging. It's been around for a while, but only very recently has it skyrocketed to prominence. I'll admit I hadn't even heard of universal default when I wrote Repair Your Credit And Knock Out Your Debt.)
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