BlackPerspective.net

By: D. Yobachi Boswell

It’s a disturbing creditor practice that allows your credit card company to decide that if you’re late on a payment of any debt (and on other factors), that the creditor that you may have never been late in paying can still raise your interest rate to 30 percent or more. This website explains it as such:

The provision, generally buried in the fine print of your credit card agreement, basically says that if you are more than 30 days late on any payment to anyone, the interest rate on your credit card could shoot up and your credit score may be damaged.

This other apologist site, which seems to be some sort of credit card trade site, ridiculously claims that:

Universal default is not meant to hurt consumers. Rather, it is intended to protect credit card companies from potential losses by charging higher interest to those customers with degrading risk profiles.

Of course that’s just code for saying it’s a way for credit card companies to get over and to unduly strain more money out of the customer for their own self-enrichment.

It does give a good list of what things will send you into universal default that you should look at.

See this PBS site for further details on Universal Credit and the history of how this and the exponential late fees applied to late payments on cards became legal.

Citibank ended the practice following being castigated by congress at a hearing in January, but it’s still legal and still being practiced by others. It will be a focal point of a soon to come Senate Banking Committee hearing.

I think we should all be writing calling our own congressmen and the ones on the relevant Senate and House committees governing this issue:

List of all Senate members: www.senate.gov/general/contact_information/senators_cfm.cfm
Senate Banking Committee: banking.senate.gov/

List of all House members: www.house.gov/
House Committee on Financial Services: financialservices.house.gov/who.html

Here’s a cribbed letter that you can feel free to sign and send, or just use in part in writting your own letter.

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This entry was posted on Monday, April 2nd, 2007 at 4:07 pm and is filed under Socio-Economic. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.