How many of you read the fine print at the bottom of your credit card or loan applications? I know I don’t always do that, and I am learning that maybe we ALL need to pay closer attention to the fine print of agreements we sign. The reason we want to make sure and do this is with a practice called “universal default”. According to Bankrate.com, if you are late to ANYONE (lenders) you have the potential of having your interest rate adjust really high, potentially affecting your payment amounts, and maybe even affect your credit. Bankrate states that the complaints about this happening is increasing because more and more customers are feeling the affects of it. In years past some credit card companies and lenders would not implement this practice. However, with tougher times affecting all businesses, they are resorting to “old” practices such as universal default.
An example of this would be if you had a debt owed to creditor A, and you fell 30 days late on it. Creditor A could call up creditor B to inform them that you fell behind on their debt. Because of what creditor A said, creditor B (who you are currently paying on time) could increase the interest rate you are being charged. This is legal because of the tiny print in your creditor agreement where it talks about universal default. Basically it gives the creditors a right to adjust the interest rate on any of your creditors if you are 30 days or more late on another one. In years past this provision was in loan agreements, but not always enforced.
Word to the wise….. read all the fine print and ask lots of questions before doing any new loans or debts.
Leadile Lead Exchange can help those customers that maybe get in the situation where they get behind on their accounts, because of situations like this.