Credit Card Companies Growing Richer

Credit cards everyone almost everyone has them and almost everyone uses them on a regular day to day basis. The credit card companies get richer and richer as more people go into debt because they are not using their credit wisely. Credit card companies make their money from all sorts of ways from APR to the over the limit fees to late charges. Now as reported by CNN News, credit card companies have discovered a new way to get into your pocket book.

Reportedly, credit card companies have exercised a new way to padding their pocket for some time now. This approach is buried deep in the contract terms of your contract card terms which cardholders sign upon agreement to use credit card privileges.

The Credit Card Company secures your agreement not by your signature or application, but by your activation and use of the card for your first purchase. So you're wondering how did I agree to these terms when I never signed a credit card agreement. This new approach to chiseling goes by the name of "universal default." This clause in your credit card agreement allows the credit card company to charge you a higher rate of interest on card purchases because of delinquency on a totally separate credit or financial obligation.

You may wonder "How did they know?" The credit reporting agencies now offer a so-called "ding" service which they sell to credit card companies which allow them real-time data whenever a card holder receives a late payment entry, collection, or other derogatory note to their credit report, which can include a drop in the card holder's credit score. This alert triggers the "universal default" clause, which then initiates the increase to your interest rate.

Reportedly, the increase in your rate can be triggered by instances as remote as an unpaid parking ticket. This practice is a direct slap in the face to credit card consumers using credit cards. After all aren't these companies making enough money already?