Mortgage Bankers Association

Consider a real-world example: a woman who bought a new $ 4000 big-screen TV a few months ago, based on the knowledge her monthly payment would be $ 175, and based on the rate of 9% of the target company card. In just five months, his total payment at the time, but in the fifth month she was late paying the mortgage account, for reasons unknown. He invented one or two months after his credit card doubled its interest rate to 18%, soincrease payment for television for about $ 190 a month. Although it has never been late on payments, that most of its other credit cards raised interest rates too much. Even her car insurance company price increases. The net effect was she ended up paying about $ 200 a month more because she was late on a loan payment.

This is a consequence of a little known or understood in clause exists in almost all in agreement about today. Aswould you feel if the company sells a product based on specific programs (including interest), called and said they are your monthly payments, for reasons that have nothing to do with them was still there? Is it really fair?

We take a step further. Could not find any customer call a company that had sold a particular product on their payments, and tell them that re-payment to the company will now be lower because they have a payment to one of them was missedsuppliers? Of course not. This clause Universal is very one-sided that consumers are victims of what one can easily verify that a practice unfair and undeserved.

Not very powerful credit card companies continue to lobby Washington to the fact that consumers must be held accountable for the terms and conditions of the contract, ignoring the most important element is that they are accountable to the same terms and conditions contract. The clause waswas introduced in the mid-nineties, after seeing an influx of bankruptcy in America. Credit card industry, fearing huge losses, decided to play in this little-known provision called the "Universal Default Clause". Simply stated that they feel the credit card companies should have the right to increase in April of a person, if a consumer is late on another credit card or the amount of debt, including outside bills such as telephone by wire or nuts. This clause is only an excuse to collect morerequire a credit card company that use of the clause. Surprisingly, it is a time when many cardholders need monthly allowance, no further financial pressure. This provision creates a natural conflict between cardholders and credit card companies, and generate a contradiction, which supplies all bitter.

According to the Office of the Comptroller of the Currency (OCC), is regarded as an unfair practice, and has recently announced that "unacceptable." Clauseusually hidden under the heading "More of April" section.

Our view: Please read each question carefully and avoid any credit card with this clause. Currently, 45 banks issuing 144 cards, 44% use the universal default clause.