Universal default is a provision that over the last few years has been added to the terms and conditions by credit card companies. Universal default permits creditors to review your credit report on a regularly, and if there are any negative changes to your credit report, then the credit card company can charge you a higher interest rate. They can do so even if it the blemish was on a completely different account!
If your credit card has a universal default clause, you need to be very cautious with all of your accounts. If you’re late to any creditor, you could default to a rate as high as 29.99 percent! Surveys have found that over 40 percent of credit card companies said they enforce the rule to customers, even if they had no late payments on that company’s card.
What Can You Do About credit card issuers being unfair?
Avoid being a victim of this horrible clause by paying all of your bills at least 5 days before they are due. Once any negative information shows up on your credit report it is virtually impossible to get the credit card company to reduce your rate to your previously low interest rate. Fortunately, CitiCards, one of the largest of the credit card companies, has recently stated that they will no longer apply or enforce the universal default clause to its customers.
You should make every attempt to convince them that you are not the one at fault for any negative error or late payment to any of your accounts. Dealing with these giants can be a daunting task. Many of their rules do not leave much room for negotiation. It is possible however to learn how to Talk Your Way Out of Credit Card Debt with the advice of Scott Bilker, Author and Financial Expert.
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