As a bankruptcy lawyer in Asheville, I spend time each day explaining how credit card companies treat their customers poorly. One way, in my view, is through universal default. Universal default is a concept common in the credit card industry where the creditor can raise your interest rate even if you have always paid their bill on time, every time. If you are late on some other bill, almost any other bill, the credit card companies are allowed to increase the rate on your credit card with them.
Why? The cardholder agreement says so (yes, they know very few people read them before signing up). Back in 2008 and 2009, credit card interest rates were raised on an enormous number of consumers, and many of you are still paying for it.
This practice is so sneaky and deceiving that our Congress tried to ban it with the 2009 Credit Card Accountability Act. However, its important to note that the Act only banned raising interest rates retroactively. Many credit card company agreements still allow the creditor to raise your interest rate for future purchases even if the consumer has never been late with a payment. Check your agreement and see what it says, and beware.
Does the minimum payment on your credit card bill eat into your household budget every month? If so, contact me for a free initial bankruptcy consultation where we can discuss how to achieve a fresh start.
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