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Most people who carry credit cards are well aware that interest rates associated with them tend to be higher than for other types of loans such as home or auto loans. Anyone who has paid their credit card bill late more than once or twice is also aware that this may cause the interest rate on your card up? sometimes by a lot. Many credit cards have interest rates of up to 20% or 25% annually, and customers who wish to avoid interest rates will make an effort to pay their bills on time. What many people do not realize, however, is that up to one third of all credit card issuers now include what is known as a “universal default clause” in their accounts. This information, usually disclosed in the fine print on the bill that few people bother to read, indicates that the interest rate on your credit card can increase if you pay your bills late to other lenders, even if you pay your bill by credit card on time. This means that paying any bill late that may appear in your credit report as an automatic payment or a utility bill could cause your credit card interest rate rise. This in turn could affect your credit score. At present, there is nothing in federal law that prohibits this practice, the law only requires that lenders disclose in writing.

The credit card companies justify this by saying that customers who pay in the afternoon so that no increased risk for all lenders. However, many if not most, customers credit card are not aware that such a policy exists. Not all credit card companies have a policy, in fact, most do not. Customers who are not interested in having interest rates of credit card linked to their ability to pay your bill your time is advised to read the fine print on your credit card. If such a policy exists, nor can complain to the issuer of your credit card on it or shop around for another credit card. The lesson to be learned here is a value? When you receive your bill by credit card or a notification that your credit card billing terms have changed, take a moment to read the fine print.