« Previous Post | Blog Home | Next Post »
The End Of Universal Default For Citi
Posted on Mar 21, 2007 by Michelle Pastor
The credit card companies have been using the practice of univeral default as a way to hike interest rates on a credit card even though the consumer has paid on time. The universal default clause which can be found in the tiny print of most credit card contracts gives the credit card company the right to pull the customer’s credit report, some companies will do it monthly, and if there have been any late payments on any other credit card or loan, the credit card that’s been paid on time can increase the interest rates. The interest rate can go up to as high as 29%!
Lawmakers have been looking into the excessive fees that the credit card companies charge and, coincidentally, Citi Group’s Citi Cards unit has dropped the universal default practice with its cardholders.
That’s really good news to credit card holders because
- Citi is a big player in the industry which means that their change alone will affect a huge percentage of credit card holders
- Where one credit card company goes, the rest will probably follow.
Filed under: Credit
Comments
Post a Comment