Tuesday, May 09, 2006

Why Credit Card companies are Loan Sharks

I haven't mentioned this in awhile, but I think it is worth mentioning again. If you think you understand what is in your credit card agreement, you are mistaken. There are a wide array of tricky twists and turns in the agreement that many attorneys have difficulty decifering. One such twist is called "Universal Default" which means that when the credit card company periodically checks your credit score, if it drops from the last time, you have defaulted on your agreement and all bets are off. Your premiums are canceled, your interest rate goes sky high, and whatever else they can take away from you is taken because you didn't uphold your side of the agreement. See more about this in a story done by Frontline and PBS called "The Secret History of the Credit Card."

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