Welcome to Universal Wealth Creation.com

This site have been developed as a resource for people

searching for the best ways to create wealth and increase the

quality of their lives. Inside you will find reviews of the latest

Investment strategies available.

Wealth Creation

Home Page

Wealth Creation

Wealth Finance & Property Articles

Are You Paying Extra Interest Charges on Your Credit Cards?
By: Jeanette Joy Fisher

Are you one of the many credit card holders who signed up for a credit account with an 8.9% interest rate and then later had your interest rate inflated to 27.4%? Have you read the fine print in your latest statement? Do you know that a little clause in the fine print of the credit card terms and agreements, called the "Universal Default Clause" may mean that you're paying a higher interest rate than when you applied for the credit card? What does this sneaky little clause mean to you?

If your credit score goes down or one of your other credit qualifications changes, then your interest rate increases, sometimes more than 10 points. This doesn't mean only new charges you make to this particular credit card account: the higher rate gets charged to the entire balance. Yes, you get charged more on items you purchased beforehand, while believing that your interest rate would remain the same.

Credit grantors periodically review their customers' credit reports. About half of all credit card companies take advantage of you if you're perceived as a high-risk borrower. The fine print in your account statement may include the universal default penalty, which allows your credit card company to increase your interest rate if they discover these conditions:

1. You have just one late payment on any credit account. They don't care if you've never made a late payment to that particular company.

2. You go over your credit limit on any account. Even if you unknowingly charge a small amount over the credit limit (which many credit card issuers let you do without notice), your interest rate can be raised.

3. Your credit score drops. Just one late payment can hurt your credit score. Experian reports that people with no late or missed payments in the last year enjoyed an average credit score of 759; consumers with one or more late payments in the past year dealt with an average score of 598.

4. You charge up too much on one account or many credit cards. If you charge up your credit card near the limit, or even charge up some of your credit cards over the preferred proportional amounts owed, you could pay extra interest. The amount owed on a credit line compared to the available credit is termed the proportional amount owed. Owing less than ten percent of the available balance gives you the best possible rating. On the other hand, owing over $4,500 on an account with a limit of $5,000 lowers your score considerably, especially if you have too many credit cards and other loans with high balances compared to available balances.

5. You open new accounts or your charge activities indicate a high debt-to-income ratio. Opening new credit lines, especially consumer finance accounts, lowers your credit score and adds notations like "Too many consumer accounts" to your credit report. If your credit card issuer sees that you've made many new charges on existing accounts and believes that you're getting in over your head, they may raise your interest rate. Even if this is a temporary situation, like new home owners who make many purchases in a single month, the companies take advantage of the unsuspecting credit card holder.

If they find any of the above conditions listed on your latest credit report, your credit card accounts that started with a low interest rate can jump to interest rates as high as 29.99%, Check your credit card statements closely; look to see if your creditor raised your interest rates. If you find that you're paying more than you agreed to, call your creditor and ask the reason. Once you determine the cause, you can work on your credit issue. After you've fixed the problem, call back and ask for a reduction in your interest rate.

Copyright (c) 2005 Jeanette J. Fisher All Rights Reserved.

About the author:

Jeanette Fisher teaches real estate investing and interior design college courses. She became a credit expert to help her students buy their dream home and multiple investment properties. Jeanette is the author of "Credit Help! Get the Credit You Need to Buy Real Estate" and other books. For more information on building and maintaining a strong credit score, explore the Real Estate Credit Help Center http://www.recredithelp.com/Credit questions? Ask Jeanette: http://recredithelp.blogspot.com/

Circulated by Article Emporium

http://www.universalwealthcreation.com Wealth Creation | Financial Wealth

Copying or republishing this article is permitted with this footer included

Collect a Free 260 page ebook here: Universal Wealth Earn up to $1,000 per referral: Wealth Creation Affiliate

These property, finance, stock market & business articles have been supplied in the interest of Universal Wealth Creations visitors who want to expand their knowledge in the wealth creation & investment fields. All the business, finance, stock market & business articles have not been read as they are submitted remotely, so if you find any questionable facts in here or simply do not like it, please email webmaster@universalwealthcreation.com and we will review the material. As we find time to do so, we will go through all articles and remove any that appear not suitable. Other sites we recommend here at Universal Wealth Creation are: 21st Century Academy with Jamie McIntyre, Investor Finance, Universal Trading Solutions which promotes great wealth creators like: Kim Reilly, Simon Martin, Justin Beeton, Louise Bedford, John Kaye, Daniel Kertcher & more. They run great seminars across the country. At times we will publish dates for these seminars as they are made available around the counrty. Meanwhile, there is a great opportunity to learn about the finance, stock market & property investment field through reading these kind of articles. Learn about share trading, options, futures, CFD's, derivatives, warrants, indices & more in the stock market. You will also learn plenty about business, finance & property investing through authors opinions in the marketplace. Enjoy your journey towards financial freedom. We hope you will enjoy your visit.

Regards Sean Rasmussen - Universal Wealth Creation Pty Ltd

Site Map

Return to Index
Return To Universal Wealth Creation Home Page