|
Author: Phil Andrews Article source: http://www.bankrate.com/. Used with author's permission.
Let's look at a real world example: A woman purchased a new $4,000 large screen TV a few months ago based on the knowledge her monthly payment was going to be $175, and based on the 9% interest rate charged by her credit card company. For five months straight she made all her payments on time, but in the fifth month she was late paying her mortgage bill, for reasons unknown. She found out a month or two later that her credit card company doubled her interest rate to 18%, thus increasing the payment for the TV to about $190 per month. Even though she was never late on any other payments, she found most of her other credit cards raised their interest rates as well. Even her car insurance company raised their rates. The net effect was she ended up paying nearly $200 per month more because she was late on a single mortgage payment.
This is a common result of a very little known or understood clause found in nearly every credit card agreement today. How would you feel if the company who sold you a product, based on certain arrangements (including the interest rate), called you up and said they were increasing your monthly payment for reasons that have absolutely nothing to do with them? Is this really fair?
Let's take this a step further. Could any customer call a company, that had sold them a particular product on payments, and tell them the re-payment to the company will now be lower because they had missed a payment to one of their suppliers? Of course not. This Universal Clause is extremely one- sided, making consumers victims of what one could easily ascertain as an unjust and unmerited practice.
Yet many powerful credit card companies continue to lobby Washington, arguing it is the consumer that needs to be held accountable to the terms and conditions of the contract, neglecting the most important element, that they are equally accountable to the same terms and conditions of the agreement. The Clause was introduced in the mid nineteen- nineties, after seeing an influx of bankruptcy filings in America. The credit card industry, fearing huge losses, decided to enact this little known clause referred to as "The Universal Default Clause". Simply stated, they feel the credit card companies should have the right to increase one's APR if a consumer is late on any other credit card or debt entity, including outside bills such as phone, cable or utilities. This clause is purely an excuse to collect more money for credit card companies who invoke the clause. Surprisingly enough it comes at a time when many cardholders need monthly relief, not additional financial strain. This clause creates a natural conflict between cardholders and credit card companies, and generates an adversarial relationship that leaves everyone bitter.
According to the Office of the Comptroller of the Currency (OCC) this is considered an unfair practice and has recently labeled it "Unacceptable". The Clause is usually hidden under the "Other APR's" section.
Our Advice: Please read each credit application carefully and avoid any card with this clause. Currently out of 45 banks issuing 144 cards, 44% use the Universal Default Clause. Phil Andrews is currently the VP of Business Development for Precept Financial Solutions, a leading debt settlement firm based in Dallas, Texas. For more information, go to http://www.PreceptFinancial.com or call toll free 800-584-0855 and press option 2.
Bridal Lingerie - What is Right for You
Bridal Lingerie.....what to wear! Do you go daring or do you ensure your Bridal Lingerie is comfy?
How Can A Communications Audit Help You?
Faulty internal communications can lead to mistakes, discouraged and unhappy staff, employees leaving the company. Poor external communications can jeopardize ...
The Scientific Breakthrough That Allows Every Couple To Choose The Gender Of Their Baby
Discover how the $1billion research project that has taken 3 decades to complete can now let any couple choose the gender of their baby with 98% accuracy - comp...
Your Organization: What Role PR?
As a manager, does your current business, non-profit or association public relations effort concern itself primarily with radio and newspaper publicity? Or does...
Exo Skeleton Technology to Train Marathon Athletes
Part of the United States Military's roadmap called the; "Future Fighting Force" calls for exo-skeleton type systems to help infantry carry large loads to preve...
Screenwriting, Screenplay, Screenwriter Tips, Tricks and Secrets
Structure, the Hero's Journey and Description...
All About Branding
Corporate Branding...does not start at your logo and stops at your products.
Postcard Marketing Your Small Business
One of the best marketing strategies a business or organization can use is postcards. Even before the arrival of online postcard printing and mailing services, ...
Anorexia - A Deadly Fashion
The typical celebrity figure has become a thing of envy among many women - but is our admiration obscuring something more sinister? Are we really just helping t...
Tips For Correcting A Golf Slice
These simple tips will show you how to cure golf slices just by practicing some basic golf swing tips and instructions.
3 Website Positioning Tactics Guaranteed to Boost Your Traffic
3 Website Positioning Tactics Guaranteed to Boost Your Traffic - Learn Exactly How to Increase Your Website Traffic Using 3 Power Tools.
Is Your Business Ethical?
Ethics - in a profession or trade - is that branch of philosophy which studies the principles of right and wrong in human conduct. Is your business ethical? W...
An RX For Your Résumé
Those seeking a new career or a new job opportunity, read this article for tips and new ways to approach this venture!
5 Signs Why He Wont Leave His Wife
Always promising but never quite delivering. Here's the 5 most common signs given that it's never going to happen.
Maintaining Employee Respect in an Uncooperative Economy
The effectiveness of a true leader is not measured in terms of the leadership he or she exercises. It is measured in the leadership evoked. It is not measured i...
Tips For Surviving As A Corporate Refugee
In her book "Are You A Corporate Refugee", Ruth Luban associates "corporate refugees" with refugees who never intend to leave their home country. People who ar...
If I Won the Lottery, I Wouldnt Have to Job Search!
Values Rule in the Job Search!
An Annuities Primer
Annuities are long-term investment tools for supplementing retirement income. There are no IRS-imposed annual contribution limits, and annuity earnings grow tax...
Are You Doing What You Love Each And Every Day?
It is easy to get caught up in the day-to-day stress of everyday life: deadlines to meet, schedules to keep, unexpected expenses, conflicts to resolve, illness ...
Happiness - A Matter of Focus
Our perception often has a lot to do with what we are focusing on, and less to do with what is really there. How can we use that to our advantage and become hap...
Job Layoff: Confronting Why Me?
The emotional trauma of being the victim of job layoff is identified along with strategies for preserving a sense of self-worth and personal value.
Golf Apparel -- The Start Of Good Golf Etiquette
Today's golfing rules of etiquette can seem archaic. They harken back to a slower paced time when consideration for others was perhaps easier. In the 21st centu...
Insurance Adjusters How They Work And How They Think
Here comes the insurance adjuster. Is he overly friendly? If so, watch out! It's OK to be hospitable. Be good-tempered and cordial - - but beware! Never fo...
The String Algae Blues
Now that Spring is upon us and things are coming back to life in your pond with the warmer weather, many of us are battling with string algae. String algae is c...
|
Print this page