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Universal default can raise your interest rate sky high

Posted on Jul 10, 2006 by Tom Fragala

Caroline Mayer writes an article in her WaPo blog, The Checkout , on a credit card industry practice you are going to want to read about. 

…under universal default, a credit-card company monitors the credit histories of its customers, even those who are current in their monthly payments. If a customer is late paying another creditor (such as another credit card company or utility)-- or has taken on so much debt that his or her credit score drops -- the credit card company automatically raises that customer's interest rate on existing and future balances. Default interest rates can be as high as 35 percent; most are around 30 percent.