Why Should Credit Card Users Know About the Universal Default Clause?
Many credit card holders know that their plastic entails paying for higher interest rates than other forms of loans such as home and car loans. Also, it is a fact of the plastic life that failure to pay your card bill on time will result in a still higher interest rate, often a substantial one. What Does The Clause Mean To You? However, what majority of credit card holders do not know is that these high interest rates will still go higher due to the universal default clause. This is indeed a very controversial provision in the contract that says your credit card provider can perform random and/or periodic check-ups of your credit report to assess your credit risk. If there is any change that negatively impacts on your credit report, the card provider can raise the interest rate on your plastic. Take note that it only swings one way. If your credit report reflects positive changes, your interest rate remains the same. Otherwise, you can expect said rate to go up into the stratosphere. I
