Don’t Let This Happen to You

A fairly new concept in the credit card world is the concept of Universal Default.  This means that credit card issuers can follow your credit scores and if they are declining, indicating that you might be a higher risk.  They can then impose the option of raising your interest rate, even if you have a perfect record with them.  If any of your accounts, not just theirs shows

• Being late
• Going over your limit
• Carrying too much debt
• Having too much available credit or
• Getting a new mortgage or car loan

they can legally up your interest rate.

The easiest way to avoid this challenge is to practice money/debt discipline.  It may be necessary to transfer your balances to a 0% interest account so you can pay the balance down faster to put yourself in a better position.

Check your credit agreements annually, and whenever there are changes look to see just what their policies are so you can avoid the unearned punishment of increased rates that can really skew your financial health.