The majority of credit card users have learned that it can take a
number of years to pay off credit card debt. The problem is that
credit cards are easy to obtain and debt builds quickly. High
interest rates and high credit limits have contributed to the highest
number of credit card defaults in history.
Credit card offers promising low interest rates and rewards have
increased the number of credit cards users by millions. What
consumers often do not realize is that if you make late payments on any
of your credit cards, not only can you stand to lose your low
introductory rate, but also once the late payment is reported to the
major credit bureaus, the rates on all your credit cards may go
up. Known as universal default, nearly forty five percent of all
banks have enacted a policy stating that if a consumer makes late
payments on any credit account, the interest rate currently being
charged to that consumer will rise.
Bounced checks, exceeding your credit limit, acquiring a new credit
card, and simply having a large amount of outstanding debt are included
in the universal default policies. Universal default can cause
your interest rates to rise dramatically regarding all your credit
accounts, not just the one in which late payments have been made.
Credit card users should use extreme caution in opening new accounts or
accumulating large amounts of debt. Universal default policies
can end up costing you hundreds or even thousands of dollars in
additional interest and fees.
